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Abstract

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Dynamic General Equilibrium Modelling for Forecasting and Policy: A Practical Guide and Documentation of MONASH
Type: Book
ISBN: 978-0-44451-260-4

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Article

Zerayehu Sime Eshete and Peter Kiko Kimuyu

The Ethiopian economy is characterized by erratic and poor performance with negative growth rates, seven times over the period 1981-2010. This trapped per capita income at…

Abstract

Purpose

The Ethiopian economy is characterized by erratic and poor performance with negative growth rates, seven times over the period 1981-2010. This trapped per capita income at 358 USD in 2010 staying far away from middle-income country status. A lot of unsolved debates regarding perpetual growth, structural change and sectoral allocation of resource emerged overtime. The purpose of this paper is to examine the alternative effects of induced sectoral total factor productivity and makes comparisons of various sectoral growth options.

Design/methodology/approach

This study uses a recursive dynamic computable general equilibrium model based on neoclassical-structuralist thought. It also calibrates coefficients that capture the impacts of openness, imported capital and liberalization on sectoral total factor productivity growth using a model of vector auto-regressive with exogenous variables.

Findings

Future economic growth rate is expected to grow at a declining trend and to be dominated by the service sector. If it keeps growing on the current path it will expose the economy to a severe structural change burden problem. Openness induced agricultural total factor productivity highly improves the welfare of households while imported capital goods induced industrial total factor productivity is also better in fostering structural change of the economy. The broad-based growth option that combines the induced total factor productivity of all sectors also enables the economy to achieve more sustainable growth, rapid structural change and welfare gain at the same time.

Originality/value

There are intensive and charged debates regarding alternative sectoral growth options. However, the debate does not derive from a rigorous analysis and holistic economy-wide approach. It is rather affiliated with politics. Therefore, the paper is original and investigates these issues meticulously.

Details

African Journal of Economic and Management Studies, vol. 7 no. 2
Type: Research Article
ISSN: 2040-0705

Keywords

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Abstract

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Handbook of Microsimulation Modelling
Type: Book
ISBN: 978-1-78350-570-8

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Article

Chuanyi Lu

The purpose of this paper is to analyze the effects of investment growth in energy sectors of western areas of China on the local economy and emission of carbon dioxide (CO2).

Abstract

Purpose

The purpose of this paper is to analyze the effects of investment growth in energy sectors of western areas of China on the local economy and emission of carbon dioxide (CO2).

Design/methodology/approach

The paper is based on a two‐region, ten‐sector recursive dynamic computable general equilibrium model which is based on the input‐output table of Shaanxi Province for 2002.

Findings

Three different scenarios are considered in a static analysis where the investment in the energy sector of western areas is increased at the rate of 20, 40 and 60 per cent. The changes of some macro‐economic variables are simulated under these scenarios. The long‐term effects on GDP and emission of CO2 in different scenarios are also simulated. The results show that the GDP growth is 0‐8.92 per cent, households disposable income growth is 0‐8.94 per cent, and emission of CO2 growth is 0‐11.10 per cent when the investment grows between 0 and 60 per cent. The oil and gas sector is the most effective sector whose growth rate is 0‐19.47 per cent. The effects of investment growth in base period are relatively big but weaken gradually over time in the long‐run.

Originality/value

The paper is of value in highlighting the importance (for policy makers) of considering the development and application of low‐emission technologies to prevent further environmental degradation.

Details

International Journal of Energy Sector Management, vol. 3 no. 1
Type: Research Article
ISSN: 1750-6220

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Article

Ken'ichi Matsumoto and Toshihiko Masui

The purpose of this study is to analyze long‐term (up to 2100) impacts of carbon tax based on the imputed price of carbon (ICT) from environmental and economic perspectives.

Abstract

Purpose

The purpose of this study is to analyze long‐term (up to 2100) impacts of carbon tax based on the imputed price of carbon (ICT) from environmental and economic perspectives.

Design/methodology/approach

ICT is an international tax with tax rates that differ among countries according to their economic levels. It is evaluated by comparing it with an internationally common carbon tax (CCT), applying the AIM/CGE [Global] model, a dynamic computable general equilibrium model. The ICT rates are determined from a certain formula and the CCT rates are set to achieve global GDP changes equal to the case of ICT.

Findings

According to the results, the world CO2 abatement amount is almost the same between the two taxes. However, the economic impact on each country is different. Although the negative influence is smaller in the case of CCT in developed countries, it is smaller in the case of ICT in developing countries. Moreover, ICT narrows economic disparities among developed and developing countries further. In the light of significance of the worldwide introduction of CO2 abatement policies and avoidance of excessive economic burdens on developing countries, it is concluded that ICT is a more feasible carbon tax policy than CCT.

Originality/value

Although the impacts of ICT have been analyzed from static and mid‐term perspectives, understanding the long‐term dynamic impacts is still essential, considering the features of the tax and possible socioeconomic and technological changes, especially in developing countries. This study proposes a new policy method that will contribute to efforts to combat climate change in the long run.

Details

Management of Environmental Quality: An International Journal, vol. 22 no. 1
Type: Research Article
ISSN: 1477-7835

Keywords

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Book part

Mohamed Abdelbasset Chemingui and Sébastien Dessus

In this paper, a recursive-dynamic CGE model is used to analyze forces that drive food self-sufficiency in Tunisia up to 2019, including domestic policies. We explore the…

Abstract

In this paper, a recursive-dynamic CGE model is used to analyze forces that drive food self-sufficiency in Tunisia up to 2019, including domestic policies. We explore the impact of two policies, agricultural liberalization and increased government spending to raise yields, as well as the role of increased urbanization. Our results indicate the presence of trade-offs between the government goals of food self-sufficiency and improved welfare for both rural and urban households. The results for a scenario that combines liberalization, increased government spending on agriculture, and accelerated urbanization shows a stronger performance in terms of both self-sufficiency and welfare objectives.

Details

Food, Agriculture, and Economic Policy in the Middle East and North Africa
Type: Book
ISBN: 978-0-76230-992-4

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Book part

Peter C.Y. Chow

Applying a computable general equilibrium model to assess the impact of tariffs between the US and China, Taiwan stands to gain from trade diversion of the trade war…

Abstract

Applying a computable general equilibrium model to assess the impact of tariffs between the US and China, Taiwan stands to gain from trade diversion of the trade war between the two largest world economies in the short term.

Initially, Taiwan suffered a minor loss from the sector-specific tariff on steel and aluminum imposed by the US. However, its loss is mitigated after counting counter measures from foreign countries. The cumulated US tariffs and China's retaliations led to trade diversion effect. Taiwan's initial loss from the steel and aluminum tariffs was over compensated by a series of trade war between the US and China.

Under the scenario of the cumulated tariffs of $250 billion of US imports and China's retaliations of $110 billion on US goods, the social welfare, exports, import and trade balance in Taiwan increased. Its terms of trade improved as well. Real wage increases slightly more for unskilled labor than for skilled labor. The short-term effect of the trade war has positive effect on all macro indicators of Taiwan's economy.

On sectoral shift, Taiwan's export will gain the most in precision engineering products ($2,941.6 million), followed by electronics ($310.7 million) and agricultural products ($31.3 million). The negative effects are in sectors such as business services ($58.323 million), other services ($46.9 million), transportation service ($36.6 million), trade service ($25.3 million), and finance service ($24.5 million). Taiwan's total imports will increase by 0.59%, whereas its total export will increase by 0.33%. However, total trade balance still increases by $451.1 million.

The study also finds that Taiwan has a high degree of overlapping export commodities with China in the US market, much higher than most major trading partners for the US, yet its market share for those products in the US is ranged from 1% to 5% only. Moreover, more than 60% of Taiwan's export to the US is in intermediate goods which have less product differentiation than those in final consumption goods. These two factors will provide an opportunity for Taiwan to exploit the US market.

Though the short-term effect of trade war is positive, Taiwan needs to have a long-range planning amid the external shocks. Policy implications for Taiwan are to map out a cosmopolitan view of its geo-strategy by diversifying outward foreign direct investment and trade destinations. It needs to reduce the “systemic risk” of relying on single market in China which is vulnerable to the uncertainty in the US–China relations. If the trade war lasts too long, Taiwan would need to reevaluate its triangular trade-investment nexus with China and the US as well as its role in the global supply chain.

Details

Advances in Pacific Basin Business, Economics and Finance
Type: Book
ISBN: 978-1-83867-363-5

Keywords

Content available
Article

Neng Shen, Yuqing Zhao and Rumeng Deng

This paper aims to review the literature on carbon trading from the perspective of evolution, finds out the evolution path of these literatures and gives out the future…

Abstract

Purpose

This paper aims to review the literature on carbon trading from the perspective of evolution, finds out the evolution path of these literatures and gives out the future research hotspots in this field.

Design/methodology/approach

Uses visualization tools (CiteSpace and HistCite) to systematically categorize the literature on carbon-trading schemes in the Web of Science core collection from 1998 to 2018, comprehensively analyzes carbon-trading schemes from four dimensions, namely, discipline evolution, keyword evolution, citation cluster evolution and citation path evolution.

Findings

Research on carbon-trading schemes has a specific development and evolution path along four dimensions, namely, in the discipline dimension, the largest change lies in the mathematics pointed to by at least four different disciplines; the keyword evolution dimension shows a gradual deepening emphasis on coordinated development; citation clusters identify three major clusters – carbon prices, China’s carbon trading, carbon market and supply chain; and citation paths identify three major evolutionary paths, the most important of which shows that “What affects carbon price?” has changed to “What is the impact of carbon prices?”

Originality/value

Reveals the evolution path of carbon trading research studies and proposes four possible development directions for carbon-trading scheme research, which is helpful for future carbon trading-related research and serves as a reference for the promotion of and improvements in carbon-trading schemes.

Details

International Journal of Climate Change Strategies and Management, vol. 12 no. 5
Type: Research Article
ISSN: 1756-8692

Keywords

Content available
Article

Zerayehu Sime Eshete, Dawit Woubishet Mulatu and Tsegaye Ginbo Gatiso

Climate change has become one of the most important development challenges worldwide. It affects various sectors, with agriculture the most vulnerable. In Ethiopia…

Abstract

Purpose

Climate change has become one of the most important development challenges worldwide. It affects various sectors, with agriculture the most vulnerable. In Ethiopia, climate change impacts are exacerbated due to the economy’s heavy dependence on agriculture. The Ethiopian Government has started to implement its climate-resilient green economy (CRGE) strategy and reduce CO2 emissions. Therefore, the purpose of this study is to examine the impact of CO2 emission on agricultural productivity and household welfare.

Design/methodology/approach

This study aims to fill these significant research and knowledge gaps using a recursive dynamic computable general equilibrium model to investigate CO2 emissions’ impact on agricultural performance and household welfare.

Findings

The results indicate that CO2 emissions negatively affect agricultural productivity and household welfare. Compared to the baseline, real agricultural gross domestic product is projected to be 4.5% lower in the 2020s under a no-CRGE scenario. Specifically, CO2 emissions lead to a decrease in the production of traded and non-traded crops, but not livestock. Emissions also worsen the welfare of all segments of households, where the most vulnerable groups are the rural-poor households.

Originality/value

The debate in the area is not derived from a rigorous analysis and holistic economy-wide approach. Therefore, the paper fills this gap and is original by value and examines these issues methodically.

Details

International Journal of Climate Change Strategies and Management, vol. 12 no. 5
Type: Research Article
ISSN: 1756-8692

Keywords

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Article

Shiwei Xu, Yumei Zhang, Xinshen Diao and Kevin Z. Chen

The purpose of this paper is to develop a dynamic computable general equilibrium (DCGE) model to analyze economy‐wide impacts of different types of public spending in…

Abstract

Purpose

The purpose of this paper is to develop a dynamic computable general equilibrium (DCGE) model to analyze economy‐wide impacts of different types of public spending in China. A particular focus is placed on their impacts on food economy.

Design/methodology/approach

In this paper, DCGE model is developed to analyze economy‐wide impacts of different types of public spending in China. The effects of increased agricultural subsidies, agricultural R&D, and irrigation are simulated by using China DCGE model.

Findings

The results show that public spending has significant impact on food production, price, and trade. The increased public spending on agricultural R&D, irrigation, and agricultural subsidy also has modest impacts on other sectors such as industry, service, and GDP growth.

Originality/value

The paper constructs the China dynamic CGE model and analyzes economy‐wide impacts of different types of public spending in China, especially for the food economy.

Details

China Agricultural Economic Review, vol. 3 no. 4
Type: Research Article
ISSN: 1756-137X

Keywords

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