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Book part
Publication date: 15 July 2017

Farzad Taheripour and Wallace E. Tyner

The purpose of this chapter is to ask and answer the question of what would happen if Genetically Modified Organism (GMO) plant materials were banned. We report on two…

Abstract

The purpose of this chapter is to ask and answer the question of what would happen if Genetically Modified Organism (GMO) plant materials were banned. We report on two studies – one with United States only ban and one with a global ban. We used a global computable general equilibrium (CGE) model, Global Trade Analysis Project (GTAP), for the analysis. This model has been used in hundreds of published papers on trade, energy, land use, and environmental issues. Our use of the model was to estimate the crop yield benefits for the major GMO crops, and then to convert this to a loss if the GMO traits were banned. We then shocked the GTAP model with the yield losses and estimate economic, land use, and greenhouse gas (GHG) emission impacts. We found that losing the GM technology would cause commodity and food prices to increase and also bring about a significant increase in GHG emissions. The increase in emissions is caused by the need to convert forest and pasture to compensate for the lost production. Another interesting conclusion of the global ban study is that economic well-being for the United States, the world’s largest GMO user, actually increases with a ban. Many regions that ban or use little GMO varieties like the European Union, India, China, and Japan all see economic well-being decrease. These counterintuitive results are driven mainly by trade patterns. Therefore GMO technology helps agriculture reduce its carbon footprint. Without this technology, agricultural land-use GHG emissions increase as do food prices. Some groups would like to see GMOs banned and also see GHG emissions fall. You cannot have it both ways.

Details

World Agricultural Resources and Food Security
Type: Book
ISBN: 978-1-78714-515-3

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Book part
Publication date: 1 June 2022

Roberto Roson and Camille Van der Vorst

This survey presents the recent and rapidly expanding literature, which analyses the economic impacts of the COVID-19 pandemic, by means of Computable General Equilibrium…

Abstract

This survey presents the recent and rapidly expanding literature, which analyses the economic impacts of the COVID-19 pandemic, by means of Computable General Equilibrium (CGE) modelling. It does so not only by contrasting and assessing the different methodological approaches, and the key findings of the simulation exercises, but also by putting the various contributions in a historical perspective. This is necessary because each CGE-based study should be evaluated while keeping in mind when it was realised, since questions, priorities, expectations have been constantly changing during the spreading of the pandemic.

Book part
Publication date: 17 October 2014

Philip Z. Maymin

Economic models based on simple rules can result in complex and unpredictable deterministic dynamics with emergent features similar to those of actual economies. I present…

Abstract

Economic models based on simple rules can result in complex and unpredictable deterministic dynamics with emergent features similar to those of actual economies. I present several such models ranging from cellular automaton and register machines to quantum computation. The additional benefit of such models is displayed by extending them to model political entanglement to determine the impact of allowing majority redistributive voting. In general, the insights obtained from simulating the computations of simple rules can serve as an additional way to study economics, complementing equilibrium, literary, experimental, and empirical approaches. I culminate by presenting a minimal model of economic complexity that generates complex economic growth and diminishing poverty without any parameter fitting, and which, when modified to incorporate political entanglement, generates volatile stagnation and greater poverty.

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Entangled Political Economy
Type: Book
ISBN: 978-1-78441-102-2

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Book part
Publication date: 4 July 2015

Firano Zakaria

In this paper, we search to evaluate the systemic risk of the Moroccan banking sector. Indeed, we concentrate on the analysis and the evaluation on transverse dimension of…

Abstract

In this paper, we search to evaluate the systemic risk of the Moroccan banking sector. Indeed, we concentrate on the analysis and the evaluation on transverse dimension of the systemic. From this point of view, two approaches were used. First is based on the estimate on value at risk conditional allowing to measure the systemic importance of each banking institution. In addition, the second approach uses the heteroscedasticity models in order to consider the conditional correlations, making it possible, to measure the dependence between the Moroccan banks and with the whole of the financial system. The results obtained with through these two approaches confirm that ATW, BMCI and the BMCE are the most systemic banks in Moroccan banking system and who can initiate a systemic crisis. On another register and by using the conditional correlations of each bank we built an index of systemic risk. Moreover, a macrofinancial model was developed, connecting the index of the systemic risk and the principal macroeconomic variables. This model affirmed that the contagion dimension of systemic risk is procyclical.

Details

Overlaps of Private Sector with Public Sector around the Globe
Type: Book
ISBN: 978-1-78441-956-1

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Book part
Publication date: 13 May 2019

Tonmoy Chatterjee

Evidences show that the annual total of all incidents along with the number of bombing incidents steadily rose through the late 1970s and began a steady decline in the…

Abstract

Evidences show that the annual total of all incidents along with the number of bombing incidents steadily rose through the late 1970s and began a steady decline in the early 1990s. Before the 1979 takeover of the US embassy in Tehran, the motivation of transnational terrorism was primarily nationalism, separatism, Marxist ideology, and nihilism. The jump in the number of incidents in the early 1980s corresponded to the rise of religious-based fundamentalism. The downward trend in the early 1990s is attributed to the demise of the Soviet Union. A surge in religious fervor and the hostilities in Iraq and Afghanistan account for the prevailing high levels of transnational terrorism. Terrorism surely affects the economy as a whole both in terms of domestic and international trade-related parameters. In this chapter we have used a general equilibrium trade model with special emphasis on terrorism activities to capture the impact of international trade on the production system of the assumed stylized developing economy. In this connection, the presence of defense sector dualism to control or defend the domestic economy has been considered from the perspective of terrorism attack, thereby helping to relate defense, terrorism, and trade within a single framework. Apart from these, the terrorism augmented welfare aspect of the said developing economy has also been introduced in this chapter. Overall, we have claimed that the gains from trade in the presence of terrorism augmented externality exclusively depend on the pattern of trade.

Details

The Impact of Global Terrorism on Economic and Political Development
Type: Book
ISBN: 978-1-78769-919-9

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Open Access
Article
Publication date: 29 March 2022

Seyoung Park

In this paper, we view an individual's annuitization decision as an American style call option whose underlying asset is financial wealth, which controls the distance to…

Abstract

In this paper, we view an individual's annuitization decision as an American style call option whose underlying asset is financial wealth, which controls the distance to annuitization. We then derive a certain threshold of wealth over which the individual is optimal to annuitize all of her wealth. We particularly focus on the effects of liquidity constraints on the individual's optimal annuitization decision, concerning their effects on the optimal investment and consumption strategies. We show that the annuitization decision can be significantly affected by the extent to which individual borrowing is constrained. More specifically, the optimal decision is for the individual to annuitize earlier with the tighter liquidity constrains she is exposed to than initially planned. This is particularly relevant to today's pandemic situation especially with the growing concern about cutting credit limits.

Details

Journal of Derivatives and Quantitative Studies: 선물연구, vol. 30 no. 2
Type: Research Article
ISSN: 1229-988X

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Article
Publication date: 8 February 2021

Bryane Michael and Simon Zhao

By modelling China’s property price changes and their effect on GDP, this study aims to develop a more general model of the costs and benefits driving price bubbles.

Abstract

Purpose

By modelling China’s property price changes and their effect on GDP, this study aims to develop a more general model of the costs and benefits driving price bubbles.

Design/methodology/approach

The authors develop a five-sector dynamic model (using data from China and seven other comparator jurisdictions), resulting in a bubble risk factor. The authors then correlate this risk factor with changes in property prices and resulting changes in GDP.

Findings

The authors find that economic structures (the way GDP, property prices and other variables change relative to each other) can change during/after a financial crisis. The authors also find that price disequilibria can help predict the risk of a property price fall – which thus reverberates into GDP change.

Originality/value

To the best of the authors’ knowledge, no dynamic models of price bubbles exist (though many exist of financial bubbles). The authors provide both theoretical novelties (such as providing a model of risk using non-linear differential equations) and practical ones (showing when we can expect Chinese GDP to fall).

Details

International Journal of Housing Markets and Analysis, vol. 14 no. 5
Type: Research Article
ISSN: 1753-8270

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Open Access
Article
Publication date: 8 December 2020

Aleksandar Vasilev

The author augments an otherwise standard business-cycle model with a rich government sector and adds monopolistic competition in the product market and rigid prices, as…

Abstract

Purpose

The author augments an otherwise standard business-cycle model with a rich government sector and adds monopolistic competition in the product market and rigid prices, as well as rigid wages a la Calvo (1983) in the labor market.

Design/methodology/approach

This specification with the nominal wage rigidity, when calibrated to Bulgarian data after the introduction of the currency board (1999–2018), allows the framework to reproduce better observed variability and correlations among model variables and those characterizing the labor market in particular.

Findings

As nominal wage frictions are incorporated, the variables become more persistent, especially output, capital stock, investment and consumption, which help the model match data better, as compared to a setup without rigidities.

Practical implications

The findings suggest that technology shocks seem to be the dominant source of economic fluctuations, but nominal wage rigidities as well as the monopolistic competition in the product market, might be important factors of relevance to the labor market dynamics in Bulgaria, and such imperfections should be incorporated in any model that studies cyclical movements in employment and wages.

Originality/value

The computational experiments performed in this paper suggest that wage rigidities are a quantitatively important model ingredient, which should be taken into consideration when analyzing the effects of different policies in Bulgaria, which is a novel result.

Details

Journal of Economics and Development, vol. 24 no. 1
Type: Research Article
ISSN: 1859-0020

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Article
Publication date: 4 April 2016

Phouphet Kyophilavong

This study aims to lay out a framework to quantify the impacts of mining booms on the macro-economy in Laos.

Abstract

Purpose

This study aims to lay out a framework to quantify the impacts of mining booms on the macro-economy in Laos.

Design/methodology/approach

A computable general equilibrium (CGE) model is used to investigate the impact of the mining sector on the Laos’ economy by examining this sector’s increase in both stock and the productivity of capital.

Findings

It was found that higher capital stock and productivity lead to increased value added, production, exports and investment in the mining sector. These increases result in higher real gross domestic product, exports and investment. Unfortunately, the effects from the associated Dutch disease negatively impact real production and value added in the agriculture and industry. Suitable macroeconomic management and prudent administration of the windfall income from mining are therefore important.

Practical implications

The finding is important for policymakers to implement policy to deal with the negative impact of mining booms.

Originality/value

It is the first study to attempt to investigate the impact of the mining sector on the Lao economy using the CGE model. Second, we also provide recommendation to cope with the negative impact from mining booms which provide important implications for other developing countries that face the negative impact from mining booms.

Details

International Journal of Development Issues, vol. 15 no. 1
Type: Research Article
ISSN: 1446-8956

Keywords

Open Access
Article
Publication date: 2 December 2020

Tran Ngoc Tam, Nguyen Minh Hai and Bantaojai Thanatporn

The purpose of this paper is to study the Hölder calmness of solutions to equilibrium problems and apply it to economics.

Abstract

Purpose

The purpose of this paper is to study the Hölder calmness of solutions to equilibrium problems and apply it to economics.

Design/methodology/approach

The authors obtain the Hölder calmness by using an effective approach. More precisely, under the key assumption of strong convexity, sufficient conditions for the Hölder continuity of solution maps to equilibrium problems are established.

Findings

A new result in stability analysis for equilibrium problems and applications in economics is archived.

Originality/value

The authors confirm that the paper has not been published previously, is not under consideration for publication elsewhere and is not being simultaneously submitted elsewhere.

Details

Asian Journal of Economics and Banking, vol. 4 no. 3
Type: Research Article
ISSN: 2615-9821

Keywords

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