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Equilibrium Framework (equilibrium + framework)
Kinds of Equilibrium Framework Selected AbstractsThe Effectiveness of Incomes Policies, in Australia Bargaining and Inflation Targetting EnterpriseAUSTRALIAN ECONOMIC PAPERS, Issue 1 2004Jenny N. Lye This paper updates earlier estimates that show the existence of a range of equilibrium rates of unemployment in Australia. Within the range of equilibria framework, the paper goes on to test the effectiveness of incomes policies, enterprise bargaining and inflation-target based monetary policy for influencing the rate of inflation in Australia in the period 1965 to 2001. Incomes policies, especially the Accord, and enterprise bargaining are shown to have caused permanent reductions in the rate of inflation. The inflation-target based monetary policy is shown to be associated with, but is not shown to have caused, a reduced impact on inflation of changes in the level of activity. [source] Default and Punishment in General Equilibrium,ECONOMETRICA, Issue 1 2005Pradeep Dubey We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by thinking of assets as pools. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our model encompasses a broad range of adverse selection and signalling phenomena in a perfectly competitive, general equilibrium framework. Perfect competition eliminates the need for lenders to compute how the size of their loan or the price they quote might affect default rates. It also makes for a simple equilibrium refinement, which we propose in order to rule out irrational pessimism about deliveries of untraded assets. We show that refined equilibrium always exists in our model, and that default, in conjunction with refinement, opens the door to a theory of endogenous assets. The market chooses the promises, default penalties, and quantity constraints of actively traded assets. [source] Union Wage Setting and Capital Income Taxation in Dynamic General EquilibriumGERMAN ECONOMIC REVIEW, Issue 2 2001Thomas Aronsson This paper concerns the effects of capital income taxation in a dynamic general equilibrium framework with union wage setting, when households face taxes related to both labor and capital. One purpose is to characterize the general equilibrium solution. Another is to study the effects of increased capital income taxation , in terms of the responses in real wages, employment, capital stock, output and consumption , and relate these behavioral responses to the overall tax structure. We also derive a cost,benefit rule for the purpose of analyzing the welfare effects of a small shift from labor income taxation to capital income taxation. [source] Comparative analysis of three user equilibrium models under stochastic demandJOURNAL OF ADVANCED TRANSPORTATION, Issue 3 2008Zhong Zhou Abstract Recent empirical studies on the value of time and reliability reveal that travel time variability plays an important role on travelers' route choice decision process. It can be considered as a risk to travelers making a trip. Therefore, travelers are not only interested in saving their travel time but also in reducing their risk. Typically, risk can be represented by two different aspects: acceptable risk and unacceptable risk. Acceptable risk refers to the reliability aspect of acceptable travel time, which is defined as the average travel time plus the acceptable additional time (or buffer time) needed to ensure more frequent on-time arrivals, while unacceptable risk refers to the unreliability aspect of unacceptable late arrivals (though infrequent) that have a travel time excessively higher than the acceptable travel time. Most research in the network equilibrium based approach to modeling travel time variability ignores the unreliability aspect of unacceptable late arrivals. This paper examines the effects of both reliability and unreliability aspects in a network equilibrium framework. Specifically, the traditional user equilibrium model, the demand driven travel time reliability-based user equilibrium model, and the ,-reliable mean-excess travel time user equilibrium model are considered in the investigation under an uncertain environment due to stochastic travel demand. Numerical results are presented to examine how these models handle risk under travel time variability. [source] Existence of a Condorcet Winner When Voters Have Other-Regarding PreferencesJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 5 2010SANJIT DHAMI In standard political economy models, voters are "self-interested" that is, care only about "own" utility. However, the emerging evidence indicates that voters often have "other-regarding preferences" (ORP), that is, in deciding among alternative policies voters care about their payoffs relative to others. We extend a widely used general equilibrium framework in political economy to allow for voters with ORP, as in Fehr and Schmidt (1999). In line with the evidence, these preferences allow voters to exhibit "envy" and "altruism," in addition to the standard concern for "own utility." We give sufficient conditions for the existence of a Condorcet winner when voters have ORP. This could open the way for an incorporation of ORP in a variety of political economy models. Furthermore, as a corollary, we give more general conditions for the existence of a Condorcet winner when voters have purely selfish preferences. [source] Endogenous City Formation with Production Externalities: Existence of EquilibriumJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 6 2007COURTNEY LAFOUNTAIN I show that equilibria exist in closed city-system models with production externalities if firms' production possibilities vary continuously with the source of the externality, are constant returns to scale in own inputs, include inaction, and satisfy free disposal; if firms have to employ their own inputs to produce output; if there is a finite number of firm types; and if some standard conditions on preferences and endowments are satisfied. This is the first model to include production externalities in the fully general equilibrium framework required for endogenous city formation. Thus, this result provides formal support for the conjecture that production externalities lead to urban agglomeration. [source] Modeling Geographic Ferrous Scrap Markets: Regional Prices and Interregional Transactions in the United States,JOURNAL OF REGIONAL SCIENCE, Issue 2 2005Gene Gruver The model uses a computer-generated equilibrium framework to solve for prices that support the observed spatial distribution of supply and demand quantities. This paper presents the model's formal structure and its solution algorithm. The model specification is highly disaggregated with 1,212 supply and 240 demand regions. Characteristics of the equilibrium solution are described for prices and interregional flows. Sensitivity of equilibrium values to changes in model parameters is reported. [source] Optimal Allocation of Land between Productive Use and Recreational UseJOURNAL OF REGIONAL SCIENCE, Issue 2 2003Eduardo L. Giménez We address this issue with a comprehensive approach. A static rational general equilibrium framework is developed in which heterogeneous agents allocate land and time endowments between alternative uses. This modeling has important advantages. First, Pareto-optimal and voluntary-contribution equilibrium allocations are obtained in a unified set-up. Second, the suboptimality result of the decentralized equilibrium, the free-rider problem on the provision of this nonexcludable public good, and different mechanisms to return the economy to its first-best are analyzed. Finally, a methodological critique is made of some empirical literature, and it is suggested that our theoretical microeconomic-based structure seems to be a suitable starting point for empirical research. [source] Unemployment May Be Lower if Unions Bargain over Wages and EmploymentLABOUR, Issue 1 2002Hartmut Egger This paper addresses the question under which circumstances unemployment can be lower if unions bargain over wages and employment in a general equilibrium framework. Thereby, it turns out that the unemployment rate may negatively depend on the wage rate, if the unemployment compensation scheme contains a constant real term in addition to the replacement ratio component. This is, compared with a pure replacement ratio scheme, the more plausible formalization of the real world's compensation systems, at least for European countries. Besides the theoretical analysis, the paper also derives political implications by identifying the relevant parameters for the decision on whether weakening unions will be a good strategy for an economy to overcome its unemployment problem. [source] The Emergence of Structural Faults on the Supply Side in Deregulated ,Energy Only' Electricity MarketsTHE AUSTRALIAN ECONOMIC REVIEW, Issue 2 2006Paul Simshauser This article examines the effect of plant entry and exit in a deregulated ,energy only' electricity market. A partial equilibrium framework is presented that determines the optimal portfolio of base, intermediate and peaking plant for a given electricity load curve. An optimal result for Queensland is compared against the actual plant stock. Analysis of the portfolio indicates that deregulation is failing a key objective, namely enhancing dynamic efficiency, because too much base plant has been delivered. The research presents scenarios of structural corrections, using the theory of the generalised war of attrition to develop the cases. Results from simulation experiments are clear,consumers will secure lower electricity prices in the short run. But oversupply of base plant may suppress prices to such an extent that they fail to signal timely entry of peaking plant,the consequence of this failure being eventual price shocks and, potentially, load shedding. [source] Equilibrium pricing of contingent claims in tradable permit marketsTHE JOURNAL OF FUTURES MARKETS, Issue 6 2010Masaaki Kijima We advance a model of the tradable permit market and derive a pricing formula for contingent claims traded in the market in a general equilibrium framework. It is shown that prices of such contingent claims exhibit significantly different properties from those in the ordinary financial markets. In particular, if the social cost function kinks at some level of abatement, the forward price, as well as the spot price, can be subject to the so-called price spike. However, this price-spike phenomenon can be weakened if a system of banking and borrowing is properly introduced. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 30:559,589, 2010 [source] WELFARE-MAXIMISING PRICING IN A MACROECONOMIC MODEL WITH IMPERFECT COMPETITION AND CONSUMPTION EXTERNALITIESAUSTRALIAN ECONOMIC PAPERS, Issue 3 2010CHI-TING CHIN This paper develops a simple macroeconomic model with imperfect competition and consumption externalities, and uses it to examine whether the marginal cost pricing rule in the partial equilibrium framework can apply to the general equilibrium framework. It is shown that, for welfare to be maximised, average revenue should be set equal to marginal cost if consumption externalities are either absent or positive. However, for welfare to be maximised, average revenue should be set higher than marginal cost in the presence of negative consumption externalities. [source] Economic impacts of bio-refinery and resource cascading systems: An applied general equilibrium analysis for PolandBIOTECHNOLOGY JOURNAL, Issue 12 2007Adriana M. Ignaciuk Dr. Abstract Due to more stringent energy and climate policies, it is expected that many traditional chemicals will be replaced by their biomass-based substitutes, bio-chemicals. These innovations, however, can influence land allocation since the demand for land dedicated to specific crops might increase. Moreover, it can have an influence on traditional agricultural production. In this paper, we use an applied general equilibrium framework, in which we include two different bio-refinery processes and incorporate so-called cascading mechanisms. The bio-refinery processes use grass, as one of the major inputs, to produce bio-nylon and propane-diol (1,3PDO) to substitute currently produced fossil fuel-based nylon and ethane-diol. We examine the impact of specific climate policies on the bioelectricity share in total electricity production, land allocation, and production quantities and prices of selected commodities. The novel technologies become competitive, with an increased stringency of climate policies. This switch, however, does not induce a higher share of bioelectricity. The cascade does stimulate the production of bioelectricity, but it induces more of a shift in inputs in the bioelectricity sector (from biomass to the cascaded bio-nylon and 1, 3PDO) than an increase in production level of bioelectricity. We conclude that dedicated biomass crops will remain the main option for bioelectricity production: the contribution of the biomass systems remains limited. Moreover, the bioelectricity sector looses a competition for land for biomass production with bio-refineries. [source] Welfare Implications of EU Enlargement under the CAPCANADIAN JOURNAL OF AGRICULTURAL ECONOMICS, Issue 4 2008Troy G. Schmitz The qualitative impacts of European Union (EU) enlargement on intervention prices, variable import levies, and export restitution payments for cereal under the Common Agricultural Policy (CAP) are analyzed using a partial equilibrium framework for EU cereal crops. The welfare implications are developed for both a net exporter and net importer. Consumer surplus, producer surplus, government revenue, and total welfare are compared and contrasted for the EU and the new entrant, both before and after enlargement. Dans le présent article, les répercussions qualitatives de l'élargissement de l'UE sur les prix d'intervention, les prélèvements variables à l'importation et les paiements de restitution à l'exportation des céréales dans le cadre de la Politique agricole commune (PAC) sont analysés à l'aide d'un modèle d'équilibre partiel pour les cultures céréalières de l'UE. Les répercussions sur le bien,être sont élaborées dans le cas d'un exportateur net et d'un importateur net. Le surplus des consommateurs, le surplus des producteurs, les recettes publiques et le bien,être total sont comparés pour l'UE et le nouveau venu, et ce, avant et après l'élargissement de l'UE. [source] | ||||||||||