Designing Efficient Subsidy Policies in a Regional Economy: A Multicriteria Decision-Making (MCDM)-Computable General Equilibrium (CGE) Approach

Since policy-makers usually pursue several conflicting objectives, policy-making can be understood as a multicriteria decision problem. Following the methodological proposal by André and Cardenete (2005) André, F. J. and Cardenete, M. A. 2005. Multicriteria Policy Making. Defining Efficient Policies in a General Equilibrium Model, Seville: Centro de Estudios Andaluces. Working Paper No. E2005/04, multi-objective programming is used in connection with a computable general equilibrium model to represent optimal policy-making and to obtain so-called efficient policies in an application to a regional economy (Andalusia, Spain). This approach is applied to the design of subsidy policies under two different scenarios. In the first scenario, it is assumed that the government is concerned just about two objectives: ensuring the profitability of a key strategic sector and increasing overall output. Finally, the scope of the exercise is enlarged by solving a problem with seven policy objectives, including both general and sectorial objectives. It is concluded that the observed policy could have been Pareto-improved in several directions.

Defining efficient policies in a general equilibrium model: a multi-objective approach

Macroeconomic policy makers are typically concerned with several indicators of economic performance. We thus propose to tackle the design of macroeconomic policy using Multicriteria Decision Making (MCDM) techniques. More specifically, we employ Multiobjective Programming (MP) to seek so-called efficient policies. The MP approach is combined with a computable general equilibrium (CGE) model. We chose use of a CGE model since they have the dual advantage of being consistent with standard economic theory while allowing one to measure the effect(s) of a specific policy with real data. Applying the proposed methodology to Spain (via the 1995 Social Accounting Matrix) we first quantified the trade-offs between two specific policy objectives: growth and inflation, when designing fiscal policy. We then constructed a frontier of efficient policies involving real growth and inflation. In doing so, we found that policy in 1995 Spain displayed some degree of inefficiency with respect to these two policy objectives. We then offer two sets of policy recommendations that, ostensibly, could have helped Spain at the time. The first deals with efficiency independent of the importance given to both growth and inflation by policy makers (we label this set: general policy recommendations). A second set depends on which policy objective is seen as more important by policy makers: increasing growth or controlling inflation (we label this one: objective-specific recommendations).

Using a CGE Model to Identify the Policy Trade-Off between Unemployment and Inflation: The Efficient Phillips Curve

This paper provides a new reading of a classical economic relation: the short-run Phillips curve. Our point is that, when dealing with inflation and unemployment, policy-making can be understood as a multicriteria decisionmaking problem. Hence, we use so-called multiobjective programming in connection with a computable general equilibrium (CGE) model to determine the combinations of policy instruments that provide efficient combinations of inflation and unemployment. This approach results in an alternative version of the Phillips curve labelled as efficient Phillips curve. Our aim is to present an application of CGE models to a new area of research that can be especially useful when addressing policy exercises with real data. We apply our methodological proposal within a particular regional economy, Andalusia, in the south of Spain. This tool can give some keys for policy advice and policy implementation in the fight against unemployment and inflation.

Climate simulation for 125 kyr BP with a coupled ocean-atmosphere general circulation model

The ECHAM-1 T21/LSG coupled ocean-atmosphere general circulation model (GCM) is used to simulate climatic conditions at the last interglacial maximum (Eemian. 125 kyr BP). The results reflect thc expected surface temperature changes (with respect to the control run) due to the amplification (reduction) of the seasonal cycle of insolation in the Northern (Southern) Hemisphere. A number of simulated features agree with previous results from atmospheric GCM simulations e.g. intensified summer southwest monsoons) except in the Northern Hemisphere poleward of 30 degrees N. where dynamical feedback, in the North Atlantic and North Pacific increase zonal temperatures about 1 degrees C above what would be predicted from simple energy balance considerations. As this is the same area where most of the terrestrial geological data originate, this result suggests that previous estimates of Eemian global average temperature might have been biased by sample distribution. This conclusion is supported by the fact that the estimated global temperature increase of only 0.3 degrees C greater than the control run ha, been previously shown to be consistent a with CLIMAP sea surface temperature estimates. Although the Northern Hemisphere summer monsoon is intensified. globally averaged precipitation over land is within about 1% of the present, contravening some geological inferences bur not the deep-sea delta(13)C estimates of terrestrial carbon storage changes. Winter circulation changes in the northern Arabian Sea. driven by strong cooling on land, are as large as summer circulation changes that are the usual focus of interest, suggesting that interpreting variations in the Arabian Sea. sedimentary record solely in terms of the summer monsoon response could sometimes lead to errors. A small monsoonal response over northern South America suggests that interglacial paleotrends in this region were not just due to El Nino variations.

Variability of the ocean heat content during the last millennium - an assessment with the ECHO-g Model

Studies addressing climate variability during the last millennium generally focus on variables with a direct influence on climate variability, like the fast thermal response to varying radiative forcing, or the large-scale changes in atmospheric dynamics (e. g. North Atlantic Oscillation). The ocean responds to these variations by slowly integrating in depth the upper heat flux changes, thus producing a delayed influence on ocean heat content (OHC) that can later impact low frequency SST (sea surface temperature) variability through reemergence processes. In this study, both the externally and internally driven variations of the OHC during the last millennium are investigated using a set of fully coupled simulations with the ECHO-G (coupled climate model ECHAMA4 and ocean model HOPE-G) atmosphere-ocean general circulation model (AOGCM). When compared to observations for the last 55 yr, the model tends to overestimate the global trends and underestimate the decadal OHC variability. Extending the analysis back to the last one thousand years, the main impact of the radiative forcing is an OHC increase at high latitudes, explained to some extent by a reduction in cloud cover and the subsequent increase of short-wave radiation at the surface. This OHC response is dominated by the effect of volcanism in the preindustrial era, and by the fast increase of GHGs during the last 150 yr. Likewise, salient impacts from internal climate variability are observed at regional scales. For instance, upper temperature in the equatorial Pacific is controlled by ENSO (El Nino Southern Oscillation) variability from interannual to multidecadal timescales. Also, both the Pacific Decadal Oscillation (PDO) and the Atlantic Multidecadal Oscillation (AMO) modulate intermittently the interdecadal OHC variability in the North Pacific and Mid Atlantic, respectively. The NAO, through its influence on North Atlantic surface heat fluxes and convection, also plays an important role on the OHC at multiple timescales, leading first to a cooling in the Labrador and Irminger seas, and later on to a North Atlantic warming, associated with a delayed impact on the AMO.

The transducer model for contrast detection and discrimination: formal relations, implications, and an empirical test.

The transducer function mu for contrast perception describes the nonlinear mapping of stimulus contrast onto an internal response. Under a signal detection theory approach, the transducer model of contrast perception states that the internal response elicited by a stimulus of contrast c is a random variable with mean mu(c). Using this approach, we derive the formal relations between the transducer function, the threshold-versus-contrast (TvC) function, and the psychometric functions for contrast detection and discrimination in 2AFC tasks. We show that the mathematical form of the TvC function is determined only by mu, and that the psychometric functions for detection and discrimination have a common mathematical form with common parameters emanating from, and only from, the transducer function mu and the form of the distribution of the internal responses. We discuss the theoretical and practical implications of these relations, which have bearings on the tenability of certain mathematical forms for the psychometric function and on the suitability of empirical approaches to model validation. We also present the results of a comprehensive test of these relations using two alternative forms of the transducer model: a three-parameter version that renders logistic psychometric functions and a five-parameter version using Foley's variant of the Naka-Rushton equation as transducer function. Our results support the validity of the formal relations implied by the general transducer model, and the two versions that were contrasted account for our data equally well.

Pupillary behavior in relation to wavelength and age

Pupil light reflex can be used as a non-invasive ocular predictor of cephalic autonomic nervous system integrity. Spectral sensitivity of the pupil's response to light has, for some time, been an interesting issue. It has generally, however, only been investigated with the use of white light and studies with monochromatic wavelengths are scarce. This study investigates the effects of wavelength and age within three parameters of the pupil light reflex (amplitude of response, latency, and velocity of constriction) in a large sample of younger and older adults (N = 97), in mesopic conditions. Subjects were exposed to a single light stimulus at four different wavelengths: white (5600° K), blue (450 nm), green (510 nm), and red (600 nm). Data was analyzed appropriately, and, when applicable, using the General Linear Model (GLM), Randomized Complete Block Design (RCBD), Student's t-test and/or ANCOVA. Across all subjects, pupillary response to light had the greatest amplitude and shortest latency in white and green light conditions. In regards to age, older subjects (46-78 years) showed an increased latency in white light and decreased velocity of constriction in green light compared to younger subjects (18-45 years old). This study provides data patterns on parameters of wavelength-dependent pupil reflexes to light in adults and it contributes to the large body of pupillometric research. It is hoped that this study will add to the overall evaluation of cephalic autonomic nervous system integrity.

Incentive based policies on climate change: taxes and tradable emssions permits

The reduction of Greenhouse Gases (GHG) plays a central role in the environmental policies considered by countries for implementation not only at its own level but also at supranational levels. This thesis is dedicated to investigate some aspects of two of the most relevant climate change policies. The first part is dedicated to emission permit markets and the second part to optimal carbon taxes. On emission permit markets we explore the strategic behavior of oligopolistic firms operating in polluting industrial sectors that are regulated by cap and trade systems. Our aim is to identify how market power influences the main results obtained under perfect competition assumptions and to understand how actions taken in one market affects the outcome of the other related market. A partial equilibrium model is developed for this purpose with specific abatement cost functions. In Chapter 2 we use the model to explain some of the most relevant literature results. In Chapter 3 the model is used to analyze different oligopolistic structures in the product market under the assumption of competitive permits market. There are two significant findings. Firstly, under the assumption of a Stackelberg oligopoly, firms have no incentives for lobbying in order to manipulate permit prices up, as they have under Cournot competition...