The life-cycle effects of social security in a model with housing and endogenous benefits

This article develops a life-cycle general equilibrium model with heterogeneous agents who make choices of nondurables consumption, investment in homeowned housing and labour supply. Agents retire from an specific age and receive Social Security benefits which are dependant on average past earnings. The model is calibrated, numerically solved and is able to match stylized U.S. aggregate statistics and to generate average life-cycle profiles of its decision variables consistent with data and literature. We also conduct an exercise of complete elimination of the Social Security system and compare its results with the benchmark economy. The results enable us to emphasize the importance of endogenous labour supply and benefits for agents' consumption-smoothing behaviour.

Infrastructure privatization in a neoclassical economy: macroeconomic impact and welfare computation

In this paper a competi tive general equilibrium model is used to investigate the welfare and long run allocation impacts of privatization. There are two types of capital in this model economy, one private and the other initially public ("infrastructure"), and a positive extemality due to the latter is assumed. A benevolent governrnent can improve upon decentralized allocation intemalizing the extemality, but it introduces distortions in the economy through the finance of its investments. It is shown that even making the best case for public action - maximization of individuais' welfare, no operation inefficiency and free supply to society of infrastructure services - privatization is welfare improving for a large set of economies. Hence, arguments against privatization based solely on under-investment are incorrect, as this maybe the optimal action when the financing of public investment are considered. When operation inefficiency is introduced in the public sector, gains from privatization are much higher and positive for most reasonable combinations of parameters.

Development of a modelling framework in support of an assessment of the economic and social impacts of climate change in the Caribbean: the ECLAC – CIAM Model

The Caribbean region remains highly vulnerable to the impacts of climate change. In order to assess the social and economic consequences of climate change for the region, the Economic Commission for Latin America and the Caribbean( ECLAC) has developed a model for this purpose. The model is referred to as the Climate Impact Assessment Model (ECLAC-CIAM) and is a tool that can simultaneously assess multiple sectoral climate impacts specific to the Caribbean as a whole and for individual countries. To achieve this goal, an Integrated Assessment Model (IAM) with a Computable General Equilibrium Core was developed comprising of three modules to be executed sequentially. The first of these modules defines the type and magnitude of economic shocks on the basis of a climate change scenario, the second module is a global Computable General Equilibrium model with a special regional and industrial classification and the third module processes the output of the CGE model to get more disaggregated results. The model has the potential to produce several economic estimates but the current default results include percentage change in real national income for individual Caribbean states which provides a simple measure of welfare impacts. With some modifications, the model can also be used to consider the effects of single sectoral shocks such as (Land, Labour, Capital and Tourism) on the percentage change in real national income. Ultimately, the model is envisioned as an evolving tool for assessing the impact of climate change in the Caribbean and as a guide to policy responses with respect to adaptation strategies.

A hybrid method for the probabilistic maximal covering location-allocation problem

Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq)

Height variability from the MIROC - IPCC model for the 20th century compared to that of the TOPEX/POSEIDON altimeter

Planetary waves are key to large-scale dynamical adjustment in the global ocean as they transfer energy from the east to the west side of oceanic basins; they connect the forcing in the ocean interior with the variability at its boundaries: and they change the local heat content, thus coupling oceanic, atmospheric, and biological processes. Planetary waves, mostly of the first baroclinic mode, are observed as distinctive patterns in global time series of sea surface height anomaly (SSHA) and heat storage. The goal of this study is to compare and validate large-scale SSHA signals from coupled ocean-atmosphere general circulation Model for Interdisciplinary Research on Climate (MIROC) with TOPEX/POSEIDON satellite altimeter observations. The last decade of the models` time series is selected for comparison with the altimeter data. The wave patterns are separated from the meso- and large-scale SSHA signals by digital filters calibrated to select the same spectral bands in both model and altimeter data. The band-wise comparison allows for an assessment of the model skill to simulate the dynamical components of the observed wave field. Comparisons regarding both the seasonal cycle and the Rossby wave Held differ significantly among basins. When carried within the same basin, differences can occur between equal latitudes in opposite hemispheres. Furthermore, at some latitudes the MIROC reproduces biannual, annual and semiannual planetary waves with phase speeds and average amplitudes similar to those observed by the altimeter, but with significant differences in phase. (C) 2008 Elsevier Ltd. All rights reserved.

Constraining H-0 in general dark energy models from Sunyaev-Zeldovich/X-ray technique and complementary probes

In accelerating dark energy models, the estimates of the Hubble constant, Ho, from Sunyaev-Zerdovich effect (SZE) and X-ray surface brightness of galaxy clusters may depend on the matter content (Omega(M)), the curvature (Omega(K)) and the equation of state parameter GO. In this article, by using a sample of 25 angular diameter distances of galaxy clusters described by the elliptical beta model obtained through the SZE/X-ray technique, we constrain Ho in the framework of a general ACDM model (arbitrary curvature) and a flat XCDM model with a constant equation of state parameter omega = p(x)/rho(x). In order to avoid the use of priors in the cosmological parameters, we apply a joint analysis involving the baryon acoustic oscillations (BA()) and the (MB Shift Parameter signature. By taking into account the statistical and systematic errors of the SZE/X-ray technique we obtain for nonflat ACDM model H-0 = 74(-4.0)(+5.0) km s(-1) Mpc(-1) (1 sigma) whereas for a fiat universe with constant equation of state parameter we find H-0 = 72(-4.0)(+5.5) km s(-1) Mpc(-1)(1 sigma). By assuming that galaxy clusters are described by a spherical beta model these results change to H-0 = 6(-7.0)(+8.0) and H-0 = 59(-6.0)(+9.0) km s(-1) Mpc(-1)(1 sigma), respectively. The results from elliptical description are in good agreement with independent studies from the Hubble Space Telescope key project and recent estimates based on the Wilkinson Microwave Anisotropy Probe, thereby suggesting that the combination of these three independent phenomena provides an interesting method to constrain the Bubble constant. As an extra bonus, the adoption of the elliptical description is revealed to be a quite realistic assumption. Finally, by comparing these results with a recent determination for a, flat ACDM model using only the SZE/X-ray technique and BAO, we see that the geometry has a very weak influence on H-0 estimates for this combination of data.

Enhanced Atlantic subpolar gyre variability through baroclinic threshold in a coarse resolution model

Direct observations, satellite measurements and paleo records reveal strong variability in the Atlantic subpolar gyre on various time scales. Here we show that variations of comparable amplitude can only be simulated in a coupled climate model in the proximity of a dynamical threshold. The threshold and the associated dynamic response is due to a positive feedback involving increased salt transport in the subpolar gyre and enhanced deep convection in its centre. A series of sensitivity experiments is performed with a coarse resolution ocean general circulation model coupled to a statistical-dynamical atmosphere model which in itself does not produce atmospheric variability. To simulate the impact of atmospheric variability, the model system is perturbed with freshwater forcing of varying, but small amplitude and multi-decadal to centennial periodicities and observational variations in wind stress. While both freshwater and wind-stress-forcing have a small direct effect on the strength of the subpolar gyre, the magnitude of the gyre's response is strongly increased in the vicinity of the threshold. Our results indicate that baroclinic self-amplification in the North Atlantic ocean can play an important role in presently observed SPG variability and thereby North Atlantic climate variability on multi-decadal scales.

Impact of volcanic stratospheric aerosols on diurnal temperature range in Europe over the past 200 years: Observations versus model simulations

We analyze the impact of stratospheric volcanic aerosols on the diurnal temperature range (DTR) over Europe using long-term subdaily station records. We compare the results with a 28-member ensemble of European Centre/Hamburg version 5.4 (ECHAM5.4) general circulation model simulations. Eight stratospheric volcanic eruptions during the instrumental period are investigated. Seasonal all- and clear-sky DTR anomalies are compared with contemporary (approximately 20 year) reference periods. Clear sky is used to eliminate cloud effects and better estimate the signal from the direct radiative forcing of the volcanic aerosols. We do not find a consistent effect of stratospheric aerosols on all-sky DTR. For clear skies, we find average DTR anomalies of −0.08°C (−0.13°C) in the observations (in the model), with the largest effect in the second winter after the eruption. Although the clear-sky DTR anomalies from different stations, volcanic eruptions, and seasons show heterogeneous signals in terms of order of magnitude and sign, the significantly negative DTR anomalies (e.g., after the Tambora eruption) are qualitatively consistent with other studies. Referencing with clear-sky DTR anomalies to the radiative forcing from stratospheric volcanic eruptions, we find the resulting sensitivity to be of the same order of magnitude as previously published estimates for tropospheric aerosols during the so-called “global dimming” period (i.e., 1950s to 1980s). Analyzing cloud cover changes after volcanic eruptions reveals an increase in clear-sky days in both data sets. Quantifying the impact of stratospheric volcanic eruptions on clear-sky DTR over Europe provides valuable information for the study of the radiative effect of stratospheric aerosols and for geo-engineering purposes.

Decadal Variability in the Northeast Pacific in a Physical-Ecosystem Model: Role of Mixed Layer Depth and Trophic Interactions

A basin-wide interdecadal change in both the physical state and the ecology of the North Pacific occurred near the end of 1976. Here we use a physical-ecosystem model to examine whether changes in the physical environment associated with the 1976-1977 transition influenced the lower trophic levels of the food web and if so by what means. The physical component is an ocean general circulation model, while the biological component contains 10 compartments: two phytoplankton, two zooplankton, two detritus pools, nitrate, ammonium, silicate, and carbon dioxide. The model is forced with observed atmospheric fields during 1960-1999. During spring, there is a similar to 40% reduction in plankton biomass in all four plankton groups during 1977-1988 relative to 1970-1976 in the central Gulf of Alaska (GOA). The epoch difference in plankton appears to be controlled by the mixed layer depth. Enhanced Ekman pumping after 1976 caused the halocline to shoal, and thus the mixed layer depth, which extends to the top of the halocline in late winter, did not penetrate as deep in the central GOA. As a result, more phytoplankton remained in the euphotic zone, and phytoplankton biomass began to increase earlier in the year after the 1976 transition. Zooplankton biomass also increased, but then grazing pressure led to a strong decrease in phytoplankton by April followed by a drop in zooplankton by May: Essentially, the mean seasonal cycle of plankton biomass was shifted earlier in the year. As the seasonal cycle progressed, the difference in plankton concentrations between epochs reversed sign again, leading to slightly greater zooplankton biomass during summer in the later epoch.

The Effects of Credit Risk on Dynamic Portfolio Management: A New Computational Approach

The study investigates the role of credit risk in a continuous time stochastic asset allocation model, since the traditional dynamic framework does not provide credit risk flexibility. The general model of the study extends the traditional dynamic efficiency framework by explicitly deriving the optimal value function for the infinite horizon stochastic control problem via a weighted volatility measure of market and credit risk. The model's optimal strategy was then compared to that obtained from a benchmark Markowitz-type dynamic optimization framework to determine which specification adequately reflects the optimal terminal investment returns and strategy under credit and market risks. The paper shows that an investor's optimal terminal return is lower than typically indicated under the traditional mean-variance framework during periods of elevated credit risk. Hence I conclude that, while the traditional dynamic mean-variance approach may indicate the ideal, in the presence of credit-risk it does not accurately reflect the observed optimal returns, terminal wealth and portfolio selection strategies.

A Simple Model of Credit Rationing with Information Externalities

Credit-rationing model similar to Stiglitz and Weiss [1981] is combined with the information externality model of Lang and Nakamura [1993] to examine the properties of mortgage markets characterized by both adverse selection and information externalities. In a credit-rationing model, additional information increases lenders ability to distinguish risks, which leads to increased supply of credit. According to Lang and Nakamura, larger supply of credit leads to additional market activities and therefore, greater information. The combination of these two propositions leads to a general equilibrium model. This paper describes properties of this general equilibrium model. The paper provides another sufficient condition in which credit rationing falls with information. In that, external information improves the accuracy of equity-risk assessments of properties, which reduces credit rationing. Contrary to intuition, this increased accuracy raises the mortgage interest rate. This allows clarifying the trade offs associated with reduced credit rationing and the quality of applicant pool.

Marine Isotope Stage (MIS) 11 results of model data with Community Climate System Model version 3 including the Dynamic Global Vegetation Model (CCSM3-DGVM) in NetCDF format at global and regional scale

The climate of Marine Isotope Stage (MIS) 11, the interglacial roughly 400,000 years ago, is investigated for four time slices, 416, 410, 400, and 394 ka. The overall picture is that MIS 11 was a relatively warm interglacial in comparison to preindustrial, with Northern Hemisphere (NH) summer temperatures early in MIS 11 (416-410 ka) warmer than preindustrial, though winters were cooler. Later in MIS 11, especially around 400 ka, conditions were cooler in the NH summer, mainly in the high latitudes. Climate changes simulated by the models were mainly driven by insolation changes, with the exception of two local feedbacks that amplify climate changes. Here, the NH high latitudes, where reductions in sea ice cover lead to a winter warming early in MIS 11, as well as the tropics, where monsoon changes lead to stronger climate variations than one would expect on the basis of latitudinal mean insolation change alone, are especially prominent. The results support a northward expansion of trees at the expense of grasses in the high northern latitudes early during MIS 11, especially in northern Asia and North America.

Euphausiid respiration model revamped, link to model results

Euphausiids constitute major biomass component in shelf ecosystems and play a fundamental role in the rapid vertical transport of carbon from the ocean surface to the deeper layers during their daily vertical migration (DVM). DVM depth and migration patterns depend on oceanographic conditions with respect to temperature, light and oxygen availability at depth, factors that are highly dependent on season in most marine regions. Changes in the abiotic conditions also shape Euphausiid metabolism including aerobic and anaerobic energy production. Here we introduce a global krill respiration model which includes the effect of latitude (LAT), the day of the year of interest (DoY), and the number of daylight hours on the day of interest (DLh), in addition to the basal variables that determine ectothermal oxygen consumption (temperature, body mass and depth) in the ANN model (Artificial Neural Networks). The newly implemented parameters link space and time in terms of season and photoperiod to krill respiration. The ANN model showed a better fit (r**2=0.780) when DLh and LAT were included, indicating a decrease in respiration with increasing LAT and decreasing DLh. We therefore propose DLh as a potential variable to consider when building physiological models for both hemispheres. We also tested for seasonality the standard respiration rate of the most common species that were investigated until now in a large range of DLh and DoY with Multiple Linear Regression (MLR) or General Additive model (GAM). GAM successfully integrated DLh (r**2= 0.563) and DoY (r**2= 0.572) effects on respiration rates of the Antarctic krill, Euphausia superba, yielding the minimum metabolic activity in mid-June and the maximum at the end of December. Neither the MLR nor the GAM approach worked for the North Pacific krill Euphausia pacifica, and MLR for the North Atlantic krill Meganyctiphanes norvegica remained inconclusive because of insufficient seasonal data coverage. We strongly encourage comparative respiration measurements of worldwide Euphausiid key species at different seasons to improve accuracy in ecosystem modelling.

Modeling the sensitivity of precipitation oxygen isotopes to the Last Glacial Maximum boundary conditions: A study using Community Atmosphere Model (CAM3.0)

To understand the validity of d18O proxy records as indicators of past temperature change, a series of experiments was conducted using an atmospheric general circulation model fitted with water isotope tracers (Community Atmosphere Model version 3.0, IsoCAM). A pre-industrial simulation was performed as the control experiment, as well as a simulation with all the boundary conditions set to Last Glacial Maximum (LGM) values. Results from the pre-industrial and LGM simulations were compared to experiments in which the influence of individual boundary conditions (greenhouse gases, ice sheet albedo and topography, sea surface temperature (SST), and orbital parameters) were changed each at a time to assess their individual impact. The experiments were designed in order to analyze the spatial variations of the oxygen isotopic composition of precipitation (d18Oprecip) in response to individual climate factors. The change in topography (due to the change in land ice cover) played a significant role in reducing the surface temperature and d18Oprecip over North America. Exposed shelf areas and the ice sheet albedo reduced the Northern Hemisphere surface temperature and d18Oprecip further. A global mean cooling of 4.1 °C was simulated with combined LGM boundary conditions compared to the control simulation, which was in agreement with previous experiments using the fully coupled Community Climate System Model (CCSM3). Large reductions in d18Oprecip over the LGM ice sheets were strongly linked to the temperature decrease over them. The SST and ice sheet topography changes were responsible for most of the changes in the climate and hence the d18Oprecip distribution among the simulations.

Three time-slice simulations of the Eemian (eem), the mid-Holocene (hol), and a pre-industrial (pri) control run with the coupled atmosphere-ocean-model ECHAM5/MPI-OM

Orbital forcing does not only exert direct insolation effects, but also alters climate indirectly through feedback mechanisms that modify atmosphere and ocean dynamics and meridional heat and moisture transfers. We investigate the regional effects of these changes by detailed analysis of atmosphere and ocean circulation and heat transports in a coupled atmosphere-ocean-sea ice-biosphere general circulation model (ECHAM5/JSBACH/MPI-OM). We perform long term quasi equilibrium simulations under pre-industrial, mid-Holocene (6000 years before present - yBP), and Eemian (125 000 yBP) orbital boundary conditions. Compared to pre-industrial climate, Eemian and Holocene temperatures show generally warmer conditions at higher and cooler conditions at lower latitudes. Changes in sea-ice cover, ocean heat transports, and atmospheric circulation patterns lead to pronounced regional heterogeneity. Over Europe, the warming is most pronounced over the north-eastern part in accordance with recent reconstructions for the Holocene. We attribute this warming to enhanced ocean circulation in the Nordic Seas and enhanced ocean-atmosphere heat flux over the Barents Shelf in conduction with retreat of sea ice and intensified winter storm tracks over northern Europe.