This study links a multi-sectoral regionalized dynamic computable general equilibrium model of Ethiopia with a system of country-specific hydrology, crop, road and hydropower engineering models to simulate the economic impacts of climate change towards 2050. In the absence of externally funded policy-driven adaptation investments Ethiopia’s GDP in the 2040s will be up to 10 percent below the co...

We study the welfare cost of market incompleteness in a generalized Bewley model where idiosyncratic risk takes the form of entrepreneurial productivity shocks. Market incompleteness in our framework has two dimensions. First, in the Bewley tradition, only a limited set of instruments for consumption smoothing is available. Second, entrepreneurs’ capital rental is subject to collateral constrai...

Economic theory points out that immigration of even low-skilled immigrants may improve public finances in Western welfare states, and it is some times suggested that fiscal sustainability problems in Western countries caused by ageing populations could be solved by increasing immigration. We examine consequences of various immigration scenarios using the large-scale computable general equilibri...

This paper provides an analytical characterization of the welfare effects of changes in cross-sectional wage dispersion, using a class of tractable heterogeneous-agent economies with various insurance market structures. We express welfare effects both in terms of changes in the observable joint distribution over individual wages, consumption and hours, and in terms of the underlying parameters ...

I evaluate the welfare effects of exogenous changes in immigration policy by constructing a heterogeneous agent overlapping generations model with agents differing in age, origin, and skills. Calibrating the model to Germany, I match the main features of the social security and tax systems, and account for differences in inter-generational transmission of skills and fertility between immigrants...

This paper focuses on the macro-economic impacts of changes in health provision via its effects on the labour market. The resource allocation issues have been explored in theory, by further developing the Rybczynski theorem and empirically, using a Computable General Equilibrium model for the UK. From the theory, changes in non-health outputs are shown to depend on socalled factor-bias and scal...

Although ecosystems provide myriad services to economies, only one service is considered in most renewable-resource models. The general equilibrium bioeconomic model introduced here admits a second service, and more importantly it accounts for how the two services are impacted by interactions within an eight-species ecosystem and interactions within a regional economy. Endangered Steller sea li...

We provide a necessary and a sufficient condition on an individual’s expected utility function under which any zero-mean idiosyncratic risk increases cautiousness (the derivative of the reciprocal of the absolute risk aversion), which is the key determinant for this individual’s demand for options and portfolio insurance. JEL Classification Codes: D51, D58, D81, G11, G12, G13.

The paper presents the results from a CGE model of interactions between public and private health care, outputs of non-health goods and national welfare in a small open economy applied to the UK. The effects on welfare of higher provision come through direct gains, affecting the well-being of households, and indirectly, through increases in the effective (i.e. ‘able to work’) endowments of skil...

We characterize a family of r-extended generalized Lorenz dominance quasi-orderings and a family of r-Gini welfare orderings, on the basis of two allegedly “incompatible” axioms for heterogeneous welfare comparisons (Ebert, 1997, Ebert and Moyes, 2003, Shorrocks, 1995), but at the cost of either completeness or separability. JEL classification: D31, D63, I31.