Taxation and Unemployment: An Applied General Equilibrium Approach

We present an applied general equilibrium modelling approach to analyse employment and unemployment effects of labour tax cuts in an economy where wages are determined through firm-union bargaining at the sectoral level. In such a labour market regime, simulations for Germany show that labour tax policies can make only a small contribution to alleviating the problem of persistent unemployment.applied general equilibrium, wage bargaining, labour tax policy

Simulations of cosmic ray feedback by AGN in galaxy clusters

We investigate a numerical model for AGN feedback where for the first time a relativistic particle population in AGN-inflated bubbles is followed within a full cosmological context. In our high-resolution simulations of galaxy cluster formation, we assume that BH accretion is accompanied by energy feedback that occurs in two different modes, depending on the accretion rate itself. Unlike in previous work, we inject a non-thermal particle population of relativistic protons into the AGN bubbles, instead of adopting a purely thermal heating. We then follow the subsequent evolution of the cosmic ray (CR) plasma inside the bubbles, considering both its hydrodynamical interactions and dissipation processes relevant for the CR population. Due to the different buoyancy of relativistic plasma and the comparatively long CR dissipation timescale we find substantial changes in the evolution of clusters as a result of CR feedback. In particular, the non-thermal population can provide significant pressure support in central cluster regions at low thermal temperatures, providing a natural explanation for the decreasing temperature profiles found in cool core clusters. At the same time, the morphologies of the bubbles and of the induced X-ray cavities show a striking similarity to observational findings. AGN feedback with CRs also proves efficient in regulating cluster cooling flows so that the total baryon fraction in stars becomes limited to realistic values of the order of 10%. We find that the partial CR support of the intracluster gas also affects the expected signal of the thermal Sunyaev-Zel'dovich effect, with typical modifications of the integrated Compton-y parameter within the virial radius of the order of 10%. [Abridged]Comment: 15 pages, 7 figures, minor revisions, MNRAS accepte

Epithelial RAC1-dependent cytoskeleton dynamics controls cell mechanics, cell shedding and barrier integrity in intestinal inflammation

Objective: Increased apoptotic shedding has been linked to intestinal barrier dysfunction and development of inflammatory bowel diseases (IBD). In contrast, physiological cell shedding allows the renewal of the epithelial monolayer without compromising the barrier function. Here, we investigated the role of live cell extrusion in epithelial barrier alterations in IBD. Design: Taking advantage of conditional GGTase and RAC1 knockout mice in intestinal epithelial cells (Pggt1biΔIEC and Rac1iΔIEC mice), intravital microscopy, immunostaining, mechanobiology, organoid techniques and RNA sequencing, we analysed cell shedding alterations within the intestinal epithelium. Moreover, we examined human gut tissue and intestinal organoids from patients with IBD for cell shedding alterations and RAC1 function. Results: Epithelial Pggt1b deletion led to cytoskeleton rearrangement and tight junction redistribution, causing cell overcrowding due to arresting of cell shedding that finally resulted in epithelial leakage and spontaneous mucosal inflammation in the small and to a lesser extent in the large intestine. Both in vivo and in vitro studies (knockout mice, organoids) identified RAC1 as a GGTase target critically involved in prenylation-dependent cytoskeleton dynamics, cell mechanics and epithelial cell shedding. Moreover, inflamed areas of gut tissue from patients with IBD exhibited funnel-like structures, signs of arrested cell shedding and impaired RAC1 function. RAC1 inhibition in human intestinal organoids caused actin alterations compatible with arresting of cell shedding. Conclusion: Impaired epithelial RAC1 function causes cell overcrowding and epithelial leakage thus inducing chronic intestinal inflammation. Epithelial RAC1 emerges as key regulator of cytoskeletal dynamics, cell mechanics and intestinal cell shedding. Modulation of RAC1 might be exploited for restoration of epithelial integrity in the gut of patients with IBD

Promoting Renewable Energy in Europe: A Hybrid CGE Approach

In this paper, we illustrate the use of a hybrid large-scale computable general equilibrium (CGE) model to investigate the economic and environmental effects of renewable energy promotion within the European Union. Our hybrid CGE model incorporates technological explicitness of bottom-up (engineering) energy system models for the electricity sector while representing aggregate technological options in other sectors in the conventional CGE approach by means of constant elasticities of substitution (transformation). The bottom-up technology foundation of top-down CGE models is possible when adopting the so-called mixed complementarity problem (MCP) approach – a flexible mathematical representation of market equilibrium conditions (Rutherford 1995). In the following section, we provide a non-mathematical characterization of the MCP approach. We then demonstrate along a stylized example how the MCP framework can be exploited to combine a simplistic macroeconomic general equilibrium model with a bottom-up technology-based model of energy supply. A large-scale implementation of a hybrid CGE model for the EU-15 is subsequently used to investigate the impacts of renewable energy promotion.JRC.J.2-Competitiveness and Sustainabilit

Computable General Equilibrium Models for Sustainability Impact Assessment: Status Quo and Prospects

Sustainability Impact Assessment (SIA) of economic, environmental, and social effects triggered by governmental policies has become a central requirement for policy design. The three dimensions of SIA are inherently intertwined and subject to trade-offs. Quantification of trade-offs for policy decision support requires numerical models in order to assess systematically the interference of complex interacting forces that affect economic performance, environmental quality, and social conditions. This paper investigates the use of computable general equilibrium (CGE) models for measuring the impacts of policy interference on policy-relevant economic, environmental, and social (institutional) indicators. We find that operational CGE models used for energy–economy–environment (E3) analyses have a good coverage of central economic indicators. Environmental indicators such as energy-related emissions with direct links to economic activities are widely covered, whereas indicators with complex natural science background such as water stress or biodiversity loss are hardly represented. Social indicators stand out for very weak coverage, mainly because they are vaguely defined or incommensurable. Our analysis identifies prospects for future modeling in the field of integrated assessment that link standard E3-CGE-models to themespecific complementary models with environmental and social focus.JRC.J.2-Competitiveness and Sustainabilit

Efficiency Gains from "What"-Flexibility in Climate Policy: An Integrated CGE Assessment

The primary objective of this paper is to ascertain the relative importance of a multi-gas emission control strategy (in our case: CO2 and CH4) vis-à-vis a CO2-only abatement strategy. In other words: We want to sort out how much can be gained if we put “what”-flexibility on top of “where”- and “when”-flexibility. The explanatory power of such a comparison depends crucially on the proper design of the overall analytical framework. Therefore, we place special emphasis on the description of the baseline calibration and the integration of climate relationships into PACE, a dynamic multi-sector, multi-region computable general equilibrium (CGE) model of global trade and energy use. Based on numerical simulation with this integrated assessment model we find that “what”-flexibility substantially reduces the compliance costs under alternative emission control schemes. When comparing policies that simply involve long-term temperature targets against more stringent strategies that include additional constraints on the rate of temperature increase, it turns out that the latter involve huge additional costs. These costs may be interpreted as additional insurance payments if damages should not only dependent on absolute temperature change but also the rate of temperature change. Our calculations also confirm the shortcomings of the global warming potential (GWP) approach to represent the contribution of different greenhouse gases to global temperature change because the relative contribution may vary substantially over time.JRC.J.2-Competitiveness and Sustainabilit

Decomposing the Integrated Assessment of Climate Change

We present a decomposition approach for integrated assessment modeling of climate policy based on a linear approximation of the climate system. Our objective is to demonstrate the usefulness of decomposition for integrated assessment models posed in a complementarity format. First, the complementarity formulation cum decomposition permits a precise representation of post-terminal damages thereby substantially reducing the model horizon required to produce an accurate approximation of the infinite-horizon equilibrium. Second, and central to the economic assessment of climate policies, the complementarity approach provides a means of incorporating second-best effects that are not easily represented in an optimization model.JRC.J.1-Economics of Climate Change, Energy and Transpor