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.

EasyInterface: a toolkit for the rapid development of GUIs for research prototype tools

During the lifetime of a research project, different partners develop several research prototype tools that share many common aspects. This is equally true for researchers as individuals and as groups: during a period of time they often develop several related tools to pursue a specific research line. Making research prototype tools easily accessible to the community is of utmost importance to promote the corresponding research, get feedback, and increase the tools’ lifetime beyond the duration of a specific project. One way to achieve this is to build graphical user interfaces (GUIs) that facilitate trying tools; in particular, with web-interfaces one avoids the overhead of downloading and installing the tools. Building GUIs from scratch is a tedious task, in particular for web-interfaces, and thus it typically gets low priority when developing a research prototype. Often we opt for copying the GUI of one tool and modifying it to fit the needs of a new related tool. Apart from code duplication, these tools will “live” separately, even though we might benefit from having them all in a common environment since they are related. This work aims at simplifying the process of building GUIs for research prototypes tools. In particular, we present EasyInterface, a toolkit that is based on novel methodology that provides an easy way to make research prototype tools available via common different environments such as a web-interface, within Eclipse, etc. It includes a novel text-based output language that allows to present results graphically without requiring any knowledge in GUI/Web programming. For example, an output of a tool could be (a structured version of) “highlight line number 10 of file ex.c” and “when the user clicks on line 10, open a dialog box with the text ...”. The environment will interpret this output and converts it to corresponding visual e_ects. The advantage of using this approach is that it will be interpreted equally by all environments of EasyInterface, e.g., the web-interface, the Eclipse plugin, etc. EasyInterface has been developed in the context of the Envisage [5] project, and has been evaluated on tools developed in this project, which include static analyzers, test-case generators, compilers, simulators, etc. EasyInterface is open source and available at GitHub2.

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).