New PDF release: A Basic Needs Policy Model: A General Equilibrium Analysis

By Arend KOUWENAAR (Eds.)

ISBN-10: 044470468X

ISBN-13: 9780444704689

Utilizing fresh study on Ecuador, this booklet discusses a social accounting matrix (SAM)-based version for simulating the results of simple wishes regulations on a variety of socio-economic teams. particular parameter selection and specification of relationships permit the overall equilibrium version to trap rigidities and occurrences of non-perfect commodity and issue markets. uncomplicated wishes delight is defined as an ``output'' because of source of revenue formation and expenditure, and dynamically associated with the structural methods of family and socio-economic workforce formation, formation of the labour strength and wealth, and labour productiveness. Simulations pay attention to the results of varied expenditure, oblique tax and redistributive regulations on earning and simple wishes pride

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Additional resources for A Basic Needs Policy Model: A General Equilibrium Analysis with Special Reference to Ecuador

Example text

With an eye the basic needs framework of chapter 1 and to do justice to the role of relative prices, six types of government intervention in resource alloca- tion and income distribution can be distinguished: i) Indirect order tax instruments to or price wedges, imposed by the government in (dis)incentivate the use of certain factors or products, to monopoly profits, or to stimulate certain sectors, to improve income distribution and achieve future productivity gains. ), of monopoly desirable monopoly (human capital infrastructure, education, health) or strategically desirable monopoly (defense industry, oil production).

Sign-preserving function, determining speed of adjustment As before, the problem is to find an "easy" solution of eq. 5). The Gauss-Seidel iteration has been frequently used for empirical general equilibrium modelling. The well-known tâtonnement is the simplest version of a Jacobi procedure: the change in price for commodity k is made 40 Chapter 2 proportional to excess demand, f, , evaluated at the previous price vector: p where: p k= λ, k+ \ £ k < p i ' " ' V <2·3·6> dampening factor, determining speed of adjustment Tâtonnement increase corresponds most to ideas about market behaviour: a price will (decrease) when excess demand is positive (negative), whereas in the more general Jacobi procedures signs may switch, as it appears that the preservation of the sign of excess demand, f, , in the price change, P/- P, , is not a computational requirement for finding a new equilibrium price vector.

3. Solution strategies There are two groups of standard solution methods for general equilibrium models, which could, in principle, be applied to the model. i) The first group of procedures refers to fixed-point algorithms, mostly 24 associated lated may with the name of Scarf. in be point They require the problem to be formu- such a way that any price vector from the set of feasible prices mapped - in a number of steps, each being a continuous point-to- mapping - into that same set of feasible prices, or: p'= g(p) where p and p' are in the set of feasible prices, and g is a continuous function.

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A Basic Needs Policy Model: A General Equilibrium Analysis with Special Reference to Ecuador by Arend KOUWENAAR (Eds.)

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