Professional Documents
Culture Documents
Contents Economic Models For Policy Making - Extracts
Contents Economic Models For Policy Making - Extracts
Over the past decades, many different kinds of models have been developed that
have been of use to policy makers, but until now the different approaches have
not been brought together with a view to enhancing the systematic unification
and evaluation of these models. This new volume aims to fill this gap by bringing
together four decades’ worth of work by S. I. Cohen on economic modelling for
policy making. Work on older models has been rewritten and brought fully up to
date, and these older models have therefore been brought back to the fore, both
to assess how they influenced more recent models and to see how they could be
4
Not for distribution
The End of Economics
Michael Perelman
12 Value, Distribution and Capital
Essays in honour of Pierangelo
Garegnani
5 Probability in Economics Edited by Gary Mongiovi and Fabio
Omar F. Hamouda and Robin Rowley Petri
106 Money, Enterprise and Income 117 Economics Versus Human Rights
Distribution Manuel Couret Branco
Towards a macroeconomic theory of
capitalism 118 Hayek Versus Marx and Today’s
John Smithin Challenges
Eric Aarons
107 Fiscal Decentralization and Local
Public Finance in Japan 119 Work Time Regulation as
Nobuki Mochida Sustainable Full Employment
S. I. Cohen
1 Introduction 1
1 Focus on economic models for exploring policies 1
2 Outline: method and content 3
3 Economy-wide policy models 4
4 Partial models 15
2
Taylor & Francis
5 Concluding remarks
21
Notes 366
References 381
Index 389
List of figures
183
9.1 The analytical framework for comparing performances 186
12.1 Government budget balance (GBD) as percentage of GDP, and
growth of GDP: the Netherlands, 1970–2010 241
13.1 Ethiopia: anticipated annual growth rates of main variables of the
education system 2005–30 according to the roadmap,
percentages 270
13.2 Ethiopia: roadmap gaps in various HRD positions, benchmark 2005 271
13.3 Ethiopia: anticipated imbalances economy wide elsewhere 277
13.4 Ethiopia: regression diagrams for four equations 283
14.1 Pakistan: educational returns under human capital and job
competition 301
15.1 Main phases in a privatisation venture 304
16.1 QALY 318
16.2 Earnings functions by age group and attained education 326
16.3 Performance under more allocations to health. Appraisal
situation I: W = L 331
16.4 Performance under more allocations to health. Appraisal
situation II: W = QL 332
xx List of figures
17.1 Relationship between the exogenous share in national income X/Y
and income per capita Y/N 337
17.2 Relationship between multipliers m and exogenous share in
national income X/Y 338
18.1 (a, b, c) Configurations of three socio-economic systems: HIM,
FIM, SIM 351
18.1 (d) A sketch of the multi-poles system (MPM) 352
18.2 Positioning of economies along axis of dominant systemic
interactions 358
18.3 Importance of household settings: country groups ranking of
importance of family 359
18.4 Pro-firm and pro-state attitudes 359
18.5 Displacement tendencies with significant effects on the future
dominance of economic systems 364
2.1 Notations 24
2.2 Causal ordering of the CEM model 29
2.3 Causal ordering of the CGE model 34
2.4 Review summary of the economy-wide models in the book: some
essentials 43
3.1 Notations 46
3.2 Basic run parameters, and changes therein under different policy
simulations, India 55
3.3 Basic run projections and policy simulations for year t = 20, India 56
The vast expansion in economic models for policy making has turned the field
almost beyond systemic comprehension. In such a mushrooming world of
economic models it is increasingly difficult to oversee the whole and deduct the
cores. Deduction is a vital task in the development and application of scientific
inquiry. Once in a while there is a need for a consolidation round in which related
models are bundled and studied in concert and in retrospect. This book is such a
consolidation round for works done by the same author on policy models in the
past four decades.
By bringing together in this book various policy modelling applications by
S. I. Cohen
Rotterdam, 2012
5 Concluding remarks
We started by stating that the field of policy modelling has flourished and mush-
roomed over the recent past to an extent that makes it increasingly difficult to
oversee the whole and deduct the cores. Deduction is a vital task in the develop-
ment and application of scientific inquiry. Once in a while there is a need for a
consolidation round in which related models are bundled and studied in retro-
1 Introduction
1 The division of models into these two categories may have its origin in the distinct
orientations of Marshall and Quesnay.
2 Krugman (1993) and Sugden (2002), among others.
3 In this context, mention can be made of a recent study by Estrada (2011) that aimed at
developing an analytical tool called the ‘Policy Modelling Consistency (PMC) Index’
for the purpose of evaluating policy modelling. The evaluation involves checks on
the use of input-output tables, and classification of variables, and identification of
parameters, among others. Estrada suggests that various possible effects of economic
policies can be shown using multidimensional graphical means.