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At the beginning of 2020, the world experienced the COVID-19 pandemic in which several countries all around the world closed their borders and established isolation measures. These types of measures, in line with the spread of the virus, mainly affected those sectors where face-to-face interaction and mobility were central, as it was the case in the tourism sector. As a response to this crisis, some countries implemented policies to promote tourism within the same country. In this paper, we study the case of a tourist program applied in Argentina and estimate its effects on the tourism sector and the overall economy with a general equilibrium perspective addressing its implications in a context where government's budget constraints are binding. [ABSTRACT FROM AUTHOR]

In 2017 the Scottish Government passed the Child Poverty (Scotland) Act with the commitment to significantly reduce the relative child poverty rate from the current prevailing level of around 25% to 10% by 2030/31. In response, the government introduced the Scottish Child Payment (SCP) that provides a direct transfer to households at a fixed rate per eligible child – currently £25 per week. In this paper we explore, using a micro to macro modelling approach, the effectiveness of using the SCP to achieve the Scottish child poverty targets. While we find that the ambitious child poverty targets can technically be met solely using the SCP, the necessary payment of £165 per week amounting to a total government cost of £3 billion per year, makes the political and economy-wide barriers significant. A key issue with only using the SCP is the non-linearity in the response to the payment; as the payment increases, the marginal gain in the reduction of child poverty decreases – this is particularly evident after payments of £80 per week. A 'policy-mix' option combining the SCP, targeted cash transfers and other policy levels (such as childcare provision) seems the most promising approach to reaching the child poverty targets. [ABSTRACT FROM AUTHOR]

The work is devoted to the modeling of the behavior of the tourism market in the conditions of a supply random lag, distributed according to normal and uniform distribution laws. The behavior of dependences on the tourist market of supply and demand on the price is considered. The modeling of the behavior of the tourism market was carried out using a market dynamic model in the plane of variables “supply – price – demand” taking into account the interests of different groups of consumers, primarily from the point of view of pricing. The delay between changes in supply and demand volumes is taken into account using a Cobweb model. To test this method, information was collected on family expenses when traveling abroad (outbound tourism, tourist vacations lasting 7-15 days) by surveying the employees of 38 travel organizations as of 2021. Three segments of the tourism market are identified: low ($2000 − 4000), medium ($4000 − 12000), and VIP-segment ($12,000 − 20,000). The analysis of the modeling results showed that the behavior of tourists of different segments can significantly influence the market dynamics. The use of a Cobweb model allowed for determining the level of stability of tourist behavior and assessing the possibility of consumer migration from one segment to another. Sensitivity to price changes and response to new offers from different segments can be different, which is important for determining pricing strategies, marketing, and the development of new tourism products.

A dynamic computable general equilibrium model is developed to analyze the distributional implications of trade liberalization in Guinea-Bissau. The model accommodates variable behavioral and social welfare functions and heterogeneous households. Although intra-group inequality has risen slightly by 0.057% due to trade liberalization, income inequality between groups has reduced by about 0.69%, and social welfare has increased. Durable goods prices remained high since they were not produced in significant quantities locally despite trade openness. This exacerbated intra-group income inequality by reducing low-income households’ accumulated wealth as their demand for durable goods rose. The study also explored the macroaggregate effects, which were positive over time. The average growth rate was about 1.38%, suggesting the potential of trade openness to improve macro and household outcomes in developing countries. Reforms in the domestic sectors, such as transport infrastructure and ports, will strengthen the economic impacts of trade openness. The implementation of such reforms and underlying challenges are equally discussed. [ABSTRACT FROM AUTHOR]

Inland waterway locks have become significant bottlenecks in waterway networks worldwide due to the disruptions caused by aging infrastructure and climate change. While these locks have traditionally received attention for traffic issues, the disruptive impact on the regional economy remains unclear. This study addresses this knowledge gap by assessing the economic impacts of inland water transportation system failures, specifically focusing on disruptions in agricultural commodities within the Upper Mississippi River–Illinois River (UMR–IR) region. These disruptions encompass both unscheduled climate-induced extreme weather events and scheduled maintenance and repair work due to internal system failure. To capture the spatial interdependence between the regional economy and shipping rate changes caused by disruptions, we developed an integrated modeling approach. This approach combines spatial econometric modeling and multi-regional computable general equilibrium modeling techniques. Detailed weekly data from 2013 to 2021, including variations in inland barge rates and environmental conditions, were utilized. The assessment reveals that lock closure events in the UMR-IR region have severe economic consequences, impacting both the region itself and beyond. Conversely, transportation resilience achieved through modal substitution from barge to rail services during disruptive events can substantially reduce GDP losses. Specifically, such resilience measures can reduce GDP losses in the UMR-IR region by 6.6–24.2% and in the rest of the USA by 5.2–19.5%. Overall, these research findings carry significant implications for future planning and investment in inland waterway systems. [ABSTRACT FROM AUTHOR]

This study explores the impact of circular economy practices on the sustainability and productivity of the food sector through a Dynamic Stochastic General Equilibrium (DSGE) model. The model includes specific blocks for recycling, waste management, and the adoption of circular technologies, providing a comprehensive analysis of their effects on key economic and environmental indicators.Simulation scenarios examine the influence of recycling rates, food waste taxes, circular technology adoption, shifts in consumer demand for sustainable products, and public policies supporting the circular economy. Results show that higher recycling rates, driven by subsidies, significantly enhance food production, increase household satisfaction, and reduce production costs. Elevated food waste taxes effectively reduce waste generation and improve waste valorization, contributing to overall well-being. The adoption of circular technologies reduces production costs and initially boosts productivity, though long-term gains diminish, indicating the need for ongoing innovation. Changes in consumer demand for sustainable products positively affect food production and the integration of recycled materials, highlighting the critical role of consumer preferences in advancing sustainable practices.Finally, public policies, particularly recycling subsidies, are essential in promoting circular economy practices, reducing costs, and enhancing productivity in the food sector. The findings underscore the importance of robust public policies, continuous innovation, and consumer engagement in driving the transition to a circular economy. This research demonstrates the significant potential of circular economy practices to transform the food sector toward greater sustainability and efficiency, offering valuable insights for policymakers and industry stakeholders.

This study aims to analyze the impacts of improved agricultural productivity (IAP) on structural transformation and poverty in Guinea-Bissau (2014–2030) using a recursive dynamic computable general equilibrium (CGE) model. We found evidence of a positive effect of IAP on growth and sectoral output. Increased wealth accumulation and labor savings in agriculture have favored reinvestments in the manufacturing and services sectors and rural workers' outflows from agriculture. There are long-term positive welfare effects from rising real income and household consumption. The poor in rural and urban settings benefited the most. We suggest an agricultural development agenda that may contribute to structural transformation in this country and improve the living standards of the poor. [ABSTRACT FROM AUTHOR]

The emergence of central bank digital currency (CBDC) is a historic event in the transformation of traditional legal monetary forms. Its issuance and circulation change the existing monetary hierarchy and monetary system. From the perspective that CBDC affects the monetary policy effectiveness, we introduce CBDC, quantity rule, and price rule into the traditional dynamic stochastic general equilibrium model, and propose a new DSGE model including households, manufacturers, the government, and the central bank. The impacts of CBDC on the effectiveness of quantity-based and price-based monetary policies are discussed separately, and three conclusions are drawn. First, the technology shock has better policy effects under the price rule. Second, the response of economic variables to the price rule shock is more significant. Third, the CBDC interest rate shock produces desirable policy effects on economic variables. Based on the above conclusions, we put forward policy suggestions and future research directions. [ABSTRACT FROM AUTHOR]

This paper analyzes the effectiveness of agriculture-led versus non-agriculture-led development strategies under climate-induced economic uncertainty. Utilizing Malawi as a case study, we introduce the application of Stochastic Dominance (SD) analysis, a tool from decision analysis theory, and compare the two strategies in the context of weather/climate-associated economic uncertainty. Our findings suggest that an agriculture-led development strategy consistently surpasses its non-agriculture-led antagonist in poverty and undernourishment outcomes across almost all possible weather/climate scenarios. This underscores that, despite increasing exposure of the entire economy to weather/climate uncertainty, agriculture-led development remains the optimal strategy for Malawi to reduce poverty and undernourishment. The study also endorses the broader use of SD analysis in policy planning studies, promoting its potential to integrate risk and uncertainty into policymaking. [ABSTRACT FROM AUTHOR]

In this paper we conduct economy-wide scenario simulations to investigate whether and how the wider economic stimulus associated with deploying heat pumps in the UK may help mitigate the macroeconomic and distributional impacts of persistently high electricity and gas prices. Our results show that expansionary processes triggered by producing and installing heat pumps can help offset contractionary pressures associated with higher energy prices. However, outcomes depend on the extent of domestic supply chain content in manufacturing heat pumps, on installation costs to households, on how and where government revenues accrue. Moreover, the relative importance of drivers varies over time. For example, higher purchase and installation costs may support a greater initial stimulus via producer and domestic supply chain gains, despite the greater cost burden on households. However, over time, cost reductions are required to deliver the most favourable economy-wide outcomes.

This study examines the economic impact of soaring international energy prices during the Russia-Ukraine conflict from February 23, 2022, to May 31, 2022. Notably, by applying a CGE model, this study offers insights into energy policies at both macroeconomic and industrial levels, emphasizing the model's utility in analyzing complex economic interactions under geopolitical stress. Findings indicate that: (1) Russia, a critical energy-producing country, faced severe economic setbacks due to sanctions, with its GDP contracting by 5.5 %, household income decreasing by 4 %, and consumer spending dropping by 3.5 %. This was accompanied by a significant reduction in domestic investment by 6 %, a decline in output by 5 %, and a decrease in societal welfare indicators. (2) Other energy-producing countries or regions, such as the Middle Eastern oil-producing countries, Australia, Canada, Mexico, and Southeast Asia, experienced economic benefits from the global energy market's “crowding-out effect.” These regions saw an increase in GDP ranging from 2 % to 4.5 %, output growth by 3 %–6 %, and household income and consumption improvements by approximately 3 %–5 %. However, these benefits were tempered by a 1 %–2.5 % decline in domestic investment due to rising local energy costs. (3) Developed and developing regions, suffered adverse impacts, including the US, UK, EU, Japan, China, South Asia, Middle Eastern non-oil-producing countries, and Africa. These regions reported a decrease in GDP by 0.5 %–3 %, a decline in household income by 2 %–4 %, and lower consumption rates by 1.5 %–3.5 %. The economic strain was further exacerbated by an inflation increase of up to 2 % across these economies. This research offers valuable insights for governments and policymakers globally to address the challenges posed by the Ukraine crisis-induced energy crisis, underscoring the need for strategic energy policy adjustments and economic resilience planning.

This article investigates the impact of a liberal migration policy that increases labour quotas by 5% on wages and income of residents, native migrants, and new migrants. The article focuses on the impact of migration in 21 areas, with particular attention given to Slovakia and Germany. It is based on data collected from the Global Trade Analysis Project database and the experimental design by Walmsley, Ahmed, and Parsons, with adjustments to capture current global migration flows. The findings indicate that the immigration of new unskilled workers negatively impacts the real wages of unskilled residents, decreasing them by almost 3%, while the arrival of skilled workers increases them by 0.73%. Similarly, the real wages of skilled residents decrease by 2.62% due to the arrival of new skilled migrants, while unskilled migration results in its increase by 0.53%. These findings can aid policymakers in developing policies that maximize the benefits of migration. This research provides new insights into the wage effects of migration in different areas, focusing on Germany and Slovakia.

The gap in the life expectancy of the elderly across educational groups is high, and this will probably increase over the coming decades. In this article, we use a computable overlapping generations model economy to show that the long-term link between heterogeneity in longevity and education could translate into an implicit tax/subsidy on the expected lifetime benefits to lifetime payroll taxes ratio, with rates around 10%, and that such rates pervert redistributive objectives of pension systems. We then analyze some parametric changes aimed at restoring the progressiveness of these systems in the long run, and find that a higher minimum pension or changes in the pension benefit formula go a long way as tools to restore the system's long-term progressivity. [ABSTRACT FROM AUTHOR]

This article focuses on the economic analysis of the exploitation of a renewable natural resource in common property, namely forests. In the Sahelian zone of West Africa with little forest cover, these natural assets are exposed to overexploitation despite the participation system established as a mode of their management for more than three decades. Thus, another mode of management is necessary to avoid the extinction of forests in certain countries like Niger to continue to benefit from the countless services that they provide. This paper proposes another mode of management by analyzing the effectiveness of the operating system through free distribution of transferable individual quotas with overlapping generations, capital, and monetary inheritance. From a general equilibrium model, the resolutions of the optimization programs using the Lagrangian show that the system in question provides the conditions for optimal management of the forest in common property. Moreover, it allows for an intergenerational transmission of renewable natural resources without any other incentive instrument such as taxes or subsidies despite the non-cooperative behavior of the actors.

This paper shows how a strategy of reducing greenhouse gas emissions combined with economic cycles can lead to particular consumption behaviours. We are assuming the existence of an "economic" demand for "non-green" goods and a "social" demand for "green" goods. We are also assuming the existence of a dispersion of household characteristics organised around an average profile in each class. In times of sustained economic recession, incomes of individual agents fall. Therefore, the budgetary constraint becomes stronger, and falling incomes will have a negative impact on the demand for "green" goods. Consumers with higher incomes will reduce their demand for "green" goods, creating pressure on prices and quantities. As consumers abandon the "green" goods market, they will switch to the "non-green" goods market, especially as prices are lower there, which will stimulate demand and create a new upward pressure on the demand for "non-green" goods. [ABSTRACT FROM AUTHOR]

This study offers a computable general equilibrium analysis of the $550 billion devoted to new infrastructure investment (new and remodeled physical infrastructure for transportation, information and public services) in the United States under the Infrastructure Investment and Jobs Act, a federal law signed by President Joseph Biden in November 2021. The simulations are based on the state-level distribution of funds and distinguish between the construction phase (short run) and the operational phase (long run). Gross domestic product (GDP) and labor demand react to the government spending stimulus after the first year by growing 0.24% and 0.44%, respectively. The gains derived from this investment plan are higher in the long term once investments increase the country's capital stock; GDP increases by 1.39% and wages by 3.94%. This paper analyzes the efficiency of the current distribution of funds across sectors, and finds that the current distribution benefits the United States economy more. Even though a slightly higher GDP impact could have been reached (1.42%) if all the funds were devoted to transport services, the price increases would result in lower real wage increases. [ABSTRACT FROM AUTHOR]

This paper examines the potential effects of agricultural investment on economic outcomes in Guinea-Bissau (2014–2030). Through a dynamic computable general equilibrium (CGE) model, we found that improved agricultural performance will positively impact economic growth, sector output, and job opportunities for rural and urban workers. The decline in food prices will propagate indirect impacts on urban household welfare, while rural households will benefit from direct and indirect effects through the decline in the consumer price index. Poverty alleviation suggests agriculture's crucial role in supporting ongoing industrialization and food security in Africa with attenuated income inequality. [ABSTRACT FROM AUTHOR]

Australia is one of the largest nations in the globe in terms of land area and is home to numerous animals alongside unique and unusual climates and immense forests and oceans. Despite having a very tiny population, the nation is an extremely valuable ecological territory. Unfortunately, due to several changes in land use, habitat loss and deterioration—particularly in light of the recent severe bush fires exacerbated by climate change—the environmental issues in Australia have got the attention of many academics. Therefore, this paper seeks to assess the association between Australia's energy use, CO 2 emission, trade liberalization, industrialization and economic growth from 1990 to 2018. An autoregressive distributed lag and a vector error correction model (VECM) are employed to take care of possible endogeneity and the long-run association. Our results demonstrated that economic growth and energy use have positive and statistically significant effects on emissions of CO 2 , but trade liberalization has a significantly adverse influence on emissions of CO 2 both in the long and short term. Granger test in VECM uncovered single-direction Granger interrelationships among trade liberalization and industrialization, as well as among industrialization and carbon dioxide. When attempting to implement effective energy policies, Australian policymakers should first take into account the prominent role played by energy usage and trade liberalization in promoting economic development and impeding environmental health. [ABSTRACT FROM AUTHOR]

This paper evaluates alternative reforms of the public pension system in an overlapping generations model for an open economy facing demographic change. We make progress compared to existing literature on pension reform by modelling individuals with heterogeneous innate ability and endogenous human capital, and by putting (the reduction of) welfare inequality effects of reform at the centre. Frequently adopted reforms such as an increase of the normal retirement age or a decrease of the pension benefit can guarantee financial sustainability, but they fail when the objective is also to avoid intergenerational or intragenerational welfare inequality. Our results prefer a reform which combines an increase of the retirement age with an intelligent linkage between the pension benefit and earlier labour earnings. First, this design conditions pension benefits on past individual labour income, with a high weight on labour income earned when older and a low weight on labour income earned when young. Second, this linkage is complemented by a strong rise in the benefit replacement rate for low ability individuals (and a reduction for high ability individuals). [ABSTRACT FROM AUTHOR]

We introduce a novel simulated certainty equivalent approximation (SCEQ) method for solving dynamic stochastic problems. Our examples show that SCEQ can quickly solve high‐dimensional finite‐ or infinite‐horizon, stationary or nonstationary dynamic stochastic problems with hundreds of state variables, a wide state space, and occasionally binding constraints. With the SCEQ method, a desktop computer will suffice for large problems, but it can also use parallel tools efficiently. The SCEQ method is simple, stable, and can utilize any solver, making it suitable for solving complex economic problems that cannot be solved by other algorithms. [ABSTRACT FROM AUTHOR]

This paper links the ENVISAGE computable general equilibrium model with a microsimulation to assess the economic effects of implementing the Regional Comprehensive Economic Partnership (RCEP). Reductions of tariffs and non-tariff measures, implementation of a rule of origin, together with productivity gains stemming from trade cost reductions strengthens regional trade among RCEP members. The analysis indicate that tariff liberalization alone brings little benefit, with real income gains of 0.21 percent relative to the baseline (without the RCEP) in 2035. With liberal rules of origin, the gains in real income could double to 0.49 percent. The biggest benefits accrue when the productivity gains are considered, increasing real income by 2.5 percent and trade among RCEP members by 12.3 percent in 2035 relative to the baseline. RCEP has the potential to lift 27 million additional people to middle-class status by 2035. These aggregate effects mask large variety of outcomes across countries.

I replicate all tables and figures from fourteen papers in Quantitative Macroeconomics, with an emphasis on incomplete market heterogeneous agent models. I report three main findings: (i) all (non-welfare related) major findings of the papers replicate, (ii) welfare findings based on linear approximation methods—1st-order perturbation, linear and log-linearization around steady-state, and linear-quadratic methods—should be treated as quantitatively suspect, (iii) decisions around methods for discretizing exogenous shocks have a large and unappreciated influence on results and should be prominently discussed in papers. While some smaller aspects of the papers do not replicate exactly, rather than nitpick in the body of this paper I instead describe some lessons learnt that may be useful for practitioners working with Quantitative Macroeconomic models. The replications use global methods allowing for non-linearities and I argue that these are important and need to be more widely used. I provide a checklist that researchers can use when trying to check that their work will be more easily reproducible. Matlab codes implementing the replications using the VFI Toolkit are provided, and full results of all replications are given in the online appendix. I conclude with three core points for best practice: (i) codes be made directly available (e.g., on github, not only 'on request', and not just inside a zip file), (ii) report not just baseline parameters but also hyperparameters, equilibrium values, non-baseline parameters and initial conditions, and (iii) replication means rewriting codes from scratch, not just re-running available codes. [ABSTRACT FROM AUTHOR]

The article analyzes the interaction between monetary and fiscal policy in Mexico. We calibrated a semi-structural model for a small open economy, based on Aguilar and Ramírez-Bulos (2018), for Mexico by using quarterly data from 2001Q1 to 2019Q4. The fiscal policy block models the fiscal deficit depending on output, an endogenous sovereign risk premium, a state-owned oil company, and public debt dynamics with domestic and foreign components. We assumed a fiscal rule whereby the deficit has an upper bound. The monetary policy follows a Taylor rule. We study the effects of different shocks on the economy, such as a drop in commodity prices, an expansion of public spending, an increase in the risk premium, a hike in the interest rate, and depreciation of the real exchange rate. We show that, remarkably, the risk premium channel transmits threats from the fiscal block to the monetary block, calling for the central bank to stabilize inflation. By contrast, starting at the economy’s steady state, an exogenous monetary policy shock affects the fiscal block mainly through the interest rate’s influence on the debt service, prompting a fiscal response to stabilize deficit.