An Application of an Integrated Transport Network– Multiregional CGE Model: a Framework for the Economic Analysis of Highway Projects

This paper develops a framework for the economic analysis of highway projects that is then used to estimate the dynamic economic effects of a highway project on the economic growth and the regional disparity in Korea. The framework is composed of a transport model and a multiregional Computable General Equilibrium (CGE) model. The transport model measures a change in interregional shortest distances and the accessibility due to the highway project. The CGE model estimates the spatial economic effects of the project on GDP, the price, exports, and the regional distribution of wages and population. The simulation allows policy makers to determine which highway development deserves the priority for investment, based on consideration of economic growth and regional economic equity in the long run. The simulation found that all the highway projects have positive effects on GDP and export growth as well as regional equity in terms of wage and population.     

SPATIAL PRICE EQUILIBRIUM AND THE TRANSPORT SECTOR: A TRADE‐CONSISTENT SCGE MODEL

In spatial computable general equilibrium models, interregional trade ought to play an important role in determining the spatial price equilibrium. Although the Armington assumption is commonly employed to describe cross‐hauling, many of the existing models do not explicitly consider the behavior of transport firms. This paper presents a framework that is compatible with the Armington assumption and explicitly considers transport activities. In the model, the trade coefficient takes the form of a potential function, and the equilibrium market price becomes similar to the price index in the context of new economic geography. The features of the model are investigated by using the minimal setting, which comprises two nontransport sectors and three regions. Because transport costs are given exogenously, the commodity prices are determined relative to them. The model can be described as a system of homogeneous equations, where an output in one region can arbitrarily be determined similarly as a price in the Walrasian equilibrium.     

中国多区域社会保障均衡的政策模拟

本文在介绍社会保障研究和多区域CGE进展的基础上,提出将社会保障研究从传统的单区域局部均衡框架推进至多区域一般均衡的研究框架,并构建了一个中国多区域社会保障可计算一般均衡模型(Multi-Regional,MReCGE-C),该模型对居民根据城乡属性和年龄结构进行了分组,放松了要素流动的限制,使劳动力和资本可以同时跨区域流动,并设计了一种基于居民终生效用的区域均衡机制,通过区域变量可以调控和测度区域差距。最后利用MReCGE-C模型针对中国社会保障政策下的两种典型方案进行了模拟。     

On the need to compensate the compensating variation in CGE modeling

The message of this research is that in the standard calibrated setting of Computational General Equilibrium (CGE) models, the welfare measures typically used to compare benchmark with counterfactuals are numéraire dependent. This evaluation bias affects the compensating variation and the Konüs index of cost of living. We show that the equivalent variation is neutral regarding the choice of value units in calibrated models but would be affected as well in uncalibrated CGE models. We illustrate with a simple example and propose an even simpler theoretical solution to overcome these biases; all that is required to have correct welfare estimates is to compensate normalizing with a suitable price index. This type of correction is necessary to overcome the sometimes blind implementation of welfare measures in numerical general equilibrium analysis. We show that the induced quantitative errors may be substantial providing biased welfare estimates and misleading results.     

太原市城市地价空间分布的影响因素分析

城市地价空间分布的形成是一个复杂的过程,是多种因素共同作用的结果。本文在运用DPS软件、arcGIS软件绘制基于采集的地价样本数据与2004年太原市公布的基准地价的地价空间分布图基础上,对影响地价空间分布的因素进行了分析,提出经济发展形势、城市规划、区域定位是影响太原市城市地价空间变化的重要因素。     

太原市城市地价空间分布的影响因素分析

城市地价空间分布的形成是一个复杂的过程,是多种因素共同作用的结果。本文在运用DPS软件、arcGIS软件绘制基于采集的地价样本数据与2004年太原市公布的基准地价的地价空间分布图基础上,对影响地价空间分布的因素进行了分析,提出经济发展形势、城市规划、区域定位是影响太原市城市地价空间变化的重要因素。     

MULTIPLE LABOR GROUPS AND THEIR EFFECTS ON SMALL CITY AND TOWN SAMS AND CGE MODELS

This paper extends Schwarm and Cutler (2003) by incorporating three labor groups while using their methods to source data and provide an organizational framework that allows effective and straightforward creation of social accounting matrices (SAMs) and regional computable general equilibrium (CGE) models. While CGE models typically describe relatively large geographical areas and are therefore not able to capture the uniqueness of individual cities or towns within the region, our model allows simulations of small cities and towns that highlight regional similarities or differences. The differing effects of both an increase in manufacturing and a change in the sales tax are examined to demonstrate the insights and regional characteristics that such methods allow a researcher to obtain.     

Trade Liberalization and Poverty in Ecuador: A CGE Macro-Microsimulation Analysis

Cross-country analysis of the aggregate growth-poverty link is likely to miss important country-specific detail and possible offsetting forces in the underlying labour market adjustment process. This paper combines a CGE model analysis with a microsimulations approach to analyse the effects of trade liberalization on poverty and income distribution in Ecuador. The CGE model enables us to disentangle the general equilibrium effects of various trade policy scenarios on sector output, employment, factor incomes and household consumption. However, as is typical of CGE models, this analysis only provides distribution results for fairly aggregated groups of workers and a reduced number of representative households. The microsimulations approach adds the full distribution to the analysis and allows simulation of the effects of trade reform on the job status and remuneration of individual workers and thereby on household income distribution and poverty. The macro- microsimulation results indicate that the trade opening in Ecuador induced mild aggregate welfare gains, but rising income inequality due to rising wage differentials between skilled and unskilled workers implies virtually no poverty-reducing effect from trade liberalization.     

区域间劳动力迁移对经济增长和地区差距的影响

本文利用一个30区域可计算一般均衡(CGE)模型,根据中国实际劳动力流动规模,并考虑了汇款、外地与本地劳动力工资差异、人口流动滞后于劳动力流动等多种因素,定量分析了区域间劳动力迁移的经济影响。结果显示,区域间劳动力迁移可以有效改善配置效率,提高经济增速缩小地区间生活水平差距,但由于在一国内部资本流动性很强,存在"资本追逐劳动"现象,因此并不能缩小人均GDP的地区差距。虽然劳动力迁移显著提高了输出的人均收入和消费水平,但单纯的劳动力输出并不能缩小同发达地区人均产出的差距。     

Productivity and energy price differentials

In taking account of the interrelationship between energy and other primary resources, labour and capital, this paper presents a methodology for quantifying regional efficiency differentials using Taylor series approximations to profit functions representing regional economies. The resulting formulation makes it possible to decompose labour productivity into its contributing factors which now include energy price differentials in addition to such traditional variables as differentials involving capital-employee ratios and the quality of labour. This approach is applied to Canadian regional data from 1962 to 1978. On average, between 5.2% and 9.2% of Canadian regional productivity differentials can be attributed to regional energy price differentials.     

Regional price deflators in Poland: evidence from NUTS-2 and NUTS-3 regions

This paper analyzes regional price differentials in Poland at the NUTS-2 and NUTS-3 levels. It applies unique raw-price data and calculates regional purchasing power parity (PPP) deflators for the 16 NUTS-2 regions. It then estimates PPP deflators for the 66 NUTS-3-level regions by applying the multiple imputation approach. Finally, it verifies whether these are intra- or interregional price inequalities that have a greater influence on the overall price inequality level. It is found that the price levels are significantly higher than the average in the better-developed regions and lower in the lagging ones. It is also found that it is the intra- rather than the interregion differentials that influence more the overall inequality level.     

ECONOMETRIC ESTIMATION OF ARMINGTON IMPORT ELASTICITIES FOR A REGIONAL CGE MODEL OF THE ILLINOIS ECONOMY

One of the main concerns associated with the development and use of regional CGE models is the determination of key parameter values, particularly substitution and other price elasticities. A common problem is the lack of appropriate regional data for econometric estimation. Consequently, it is important to identify key parameters that are likely to be important in determining quantitative results and then to prioritize these for estimation where appropriate data are available. In this paper, the focus is on the estimation of the regional trade (import) substitution parameters, which tend to be important in analysis for regional economies (given their openness to trade). Here, commodity import elasticities for the Illinois economy are estimated and tested in a single region CGE model of the Illinois economy. In our econometric estimation, we apply a model that takes account of market size and distance in estimating the substitutability between commodities produced in Illinois and other US states.     

Amenities in an urban general equilibrium model

This paper has presented a general equilibrium Tiebout-median voter model. The model was solved numerically for prices and distributions of consumers which correspond to equilibria, and the results of the numerical solution of the model were used to evaluate the HES and Yinger Propositions. That complete capitalization always occurs means that the HES Proposition is false; Yinger's Proposition is misdirected since complete capitalization occurs regardless of the presence or absence of amenities (although amenities affect the equilibrium solutions). We have argued that capitalization is never appropriately measured by price differentials in a general equilibrium model.     

Natural oligopolies with exogenous sunk costs: A non-Suttonian result

In a spatial competition model with exogenous fixed costs and divisible goods, we obtain non-Suttonian results. When the economy is infinitely replicated, the number of firms does go to infinity but, as consumers’ income goes to infinity, the equilibrium number of firms tends toward a finite value. This occurs because the global demand to each firm becomes in the limit infinitely sensitive to price differentials since they give then rise to infinitely large differences in purchase expenditure.     

EVALUATING SUPPLY-SIDE AND DEMAND-SIDE SHOCKS FOR FISHERIES: A COMPUTABLE GENERAL EQUILIBRIUM (CGE) MODEL FOR ALASKA

This study used computable general equilibrium (CGE) models to investigate the economic effects of three exogenous shocks to Alaska fisheries: (1) reduction in pollock allowable catch (TAC); (2) increase in fuel price; and (3) reduction in demand for seafood. Two different model versions, ‘Keynesian’ and ‘neoclassical’, were used to estimate impacts on endogenous output, employment, value added, and household income. By using a CGE model, this study overcomes the limitations of fixed-price models (such as input–output models) including (1) inability to calculate welfare effects due to fixed prices; and (2) difficulty of addressing supply-side shocks. There are currently few examples of CGE studies addressing fisheries issues appearing in the literature. Among those, this study is unique in that it uses a relatively disaggregated sector scheme and examines both supply-side and demand-side shocks.     

Investigating the PPP hypothesis using constructed U.S. dollar equilibrium exchange rate misalignments over the post-bretton woods period

This paper investigates the PPP-hypothesis over the post-Bretton Woods period using a representation of the equilibrium exchange rate (EER) that is an alternative to the real exchange rate. The results provide evidence in support of the relative-PPP hypothesis over the current period of floating exchange rates (1974–2005); while stronger evidence is found for the post-Plaza Accord period (1986–2005). EERs based on export price indexes (EPI) and constructed traded goods price indexes (TPI) best demonstrate the mean reverting behavior of the spot exchange rate as opposed to those EERs based on CPI, PPI, or the GDP-deflator. This mean reverting behavior is slightly improved if one takes international interest rate differentials into account; however EERs extended by productivity differentials do not indicate any improvements over the base model. Over the post-Plaza Accord period average half-lives of less than 1 year are reported using TPI-based EERs, adjusted by interest rate differentials. For large misalignments, we find probabilities that the spot exchange rate will converge towards the constructed CPI-based equilibrium exchange rate of up to 80%. Lastly, over the post-Plaza Accord period, the TPI-based EERs are able to statistically significantly outperform the pure random walk at short-term forecast horizons of less than 1 year for some spot exchange rates.     

Price distortion in the transition process: A CGE analysis of China's case

The correct evaluation of price distortion is a prerequisite for designing the correct price reform policy which is of tremendous importance in the transitions process from a centrally planned economy to a market economy. The purpose of this paper is to investigate the advantages and shortcomings of various criteria for evaluating price distortion. Based on the characteristics of a two-tiered planned-market system in Chinese economic reform, a computable general equilibrium (CGE) model has been built to evaluate quantitatively the degree of price distortion in the prevailing price system and the effects of price adjustments in order to propose a reasonable price reform policy. The difference between the planned price and the equilibrium price seems to be a better indicator for evaluating the degree of price distortion than others. Furthermore, this difference provides more accurate feedback for price reform policies in order to ensure a stable and controllable price reform process.     

China and international market integration: Evidence from the law of one price in the Middle East and Africa

We model market integration in the Middle East and Africa by analyzing price dispersion and testing the law of one price (LOP) on highly-comparable actual local retail prices of 135 goods and services across 23 countries in the region over the period of 1990–2016. Second-generation panel estimators are applied to four price benchmarks: Regional average, South Africa, China, and US prices. Cross-regional price dispersion diminishes considerably over time up to 2008, particularly for non-tradeables around China price. The test of LOP indicates the percentage of convergent prices is highest in China price benchmark, followed by US, South Africa, and regional average benchmarks. Direct estimation of the convergence speed confirms this order. Overall, the results show evidence of increasing market integration in Middle East and Africa but it appears to be driven by global forces and, especially, the rise of China as a new economic power. The results show that some emerging market economies, such as China, can step up and promote integration while traditional economic powerhouses, such as the USA and UK, disengage from international economic relations.     

Impacts of Reduced Gaming Exports on the Economy of Nevada

Previous studies of gaming have not calculated numerically the negative, economy-wide impacts on the Nevada economy from potential expansion of the gaming industry outside of the state. This study uses a state-level, two-sector computable general equilibrium (CGE) model of Nevada to investigate such impacts. In the Nevada CGE, both commodity prices and factor prices are endogenously determined and the impacts on major economic variables such as output, employment, and government revenue are estimated. Three different model variants are specified. Each variant is based on different assumptions regarding intersectoral and interregional factor mobility to analyze model sensitivity. Results show that the impacts on Nevada of the nationwide expansion of gaming could be significant under reasonable assumptions about factor mobility for Nevada. Also, results for total regional output and total government revenue are found to be very sensitive to the alternative factor mobility assumptions.