Why the determinacy condition is a weak criterion in rational expectations models

This paper disputes what Blanchard and Kahn have reported as the solution of linear rational expectation(RE) systems many years ago. Their method leads to traditional determinacy condition which is used very much nowadays. In this paper we have a new look to the mathematical procedure of this solution method and the main problem in their solution will be shown. We introduce a new methodology for modeling the systems with expectation, while in future this way of modeling can be used to replace traditional RE models.Rational expectation; Determinacy condition; Stability; Uniqueness; Predictive control

Why the determinacy condition is a weak criterion in rational expectations models

This paper disputes what Blanchard and Kahn have reported as the solution of linear rational expectation(RE) systems many years ago. Their method leads to traditional determinacy condition which is used very much nowadays. In this paper we have a new look to the mathematical procedure of this solution method and the main problem in their solution will be shown. We introduce a new methodology for modeling the systems with expectation, while in future this way of modeling can be used to replace traditional RE models

A decision support system for evaluating effects of feed-in tariff mechanism: dynamic modeling of Malaysia’s electricity generation mix

Malaysia has abundant potentials of renewable energy resources mainly because of its rich agriculture that makes high potential in bio-power and its tropical climate, which provides sufficient sunlight for utilization of solar systems. Feed in Tariff mechanism has been applied since 2011 in Malaysia to expand utilization of renewable energy for electricity generation. In this study, a broad range of data is gathered to develop a comprehensive system dynamics model to evaluate the impacts of Feed in Tariff mechanism on the generation mix of Malaysia during a 20-year period between 2011 and 2030. Results demonstrate that although the policy may lead to a satisfactory level of target achievement but the Malaysian government may face an increasing shortage in its RE fund budget starting around 2019 unless it increases its income sources by rising the surcharges on electricity bills or decreases its expenditures by optimizing the amount of FiT payments in different periods. The sensitivity analysis illustrates that the more funding will not lead to a more sustainable generation mix unless it is paid in the right time and in the right direction. Using this model, policymakers can carry out analysis to determine the amount of money that must be collected from the electricity consumers through the surcharges on electricity bills as well as the amount of feed in tariff to be paid for different renewable resources in different periods

A predictive multi-agent approach to model systems with linear rational expectations

Expectation formation plays a principal role in economic systems. We examine and revise the standard rational expectations (RE) model, generally taken as the best paradigm for expectations modelling, and suggest a new method to model rational expectations. Conventional conditions that assert the stability and uniqueness of popular solution methods are shown to be insufficient. The agent-based new modelling approach suggested in this paper will be shown to lead to uniquely stable solutions

A predictive multi-agent approach to model systems with linear rational expectations

Expectation formation plays a principal role in economic systems. We examine and revise the standard rational expectations (RE) model, generally taken as the best paradigm for expectations modelling, and suggest a new method to model rational expectations. Conventional conditions that assert the stability and uniqueness of popular solution methods are shown to be insufficient. The agent-based new modelling approach suggested in this paper will be shown to lead to uniquely stable solutions

A Decision Model for Selecting the Optimum Oil Production Profile Using Multi Criteria Decision Making and Social Choice Theory

Applying a MCDM model has many benefits for decision makers in the course of oil field master development plans preparation and evaluation. In this study, a multi-criteria decision making model is proposed in order to achieve an optimum production profile. The most important criteria and parameters for selection of best production profile are identified. These parameters are derived by several interviews with Iranian oil Industry’s experts. The candidate alternatives for production profile are ranked using a combination of group decision making approach and social choice theory. The degree of group consensus is evaluated by using a statistic model to confirm the validity of decision making model.</jats:p

System Analysis Gasoline Demand and Estimating the Price Elasticity in the Province of Tehran

The increasing use of cars in human life caused growth and development, but with the pervasive use of these vehicles, especially for personal use, it caused problems and harmful effects on health, economy and the environment. large parts of these effects are because of the amount and the way of energy consumption. To manage the fuel consumption, especially in the transportation sector, at first, it is necessary to extract the mechanism of consumption forming and then try to improve it. System Dynamics (SD) are the most important tools used in management and analysis and solving major economic issues. In this paper, first, by using Causal Loop Diagram (CLD), structure and variables affecting amounts of gasoline consumption are shown. In the next step validation of the simulation model is analyzed and after model validation, the price elasticity of gasoline demand of Tehran province is computed. This elasticity for short and long-term are -0.092 and 0.129, respectively. Calculated elasticites in this study decreased rather than previous research, these results refer to less proportion of gasoline price to individual incomes and higher need for transportation in Tehran