MISTRAL

This report outlines the MISTRAL model (Administrative Compliance Cost Assessment Tool), by emphasising the issues of when a model may be applied, why it will be applied, how the model works and why the model should be used. The report concludes by narrating several results obtained on the basis of MISTRAL.

Dynamic general-equilibrium model of an open economy: A comment

The model developed by Devarajan and Go [Devarajan S., & Go S. (1998). The simplest dynamic general-equilibrium model of an open economy. Journal of Policy Modeling, 20(6), 677-714] presents the simplest possible general-equilibrium model of an open economy in which producers\u27 and consumers\u27 decisions are both intra-and inter-temporally consistent. Unfortunately, there is possible leakage in that imported capital goods are taxed twice, yet these taxes do not show up fully in the government\u27s budget constraint. Additionally, one of the proposed terminal conditions is implied by the other equations because of Walras\u27 Law. Therefore, the model description is lacking an appropriate terminal condition. In this paper an alternative set of equations is presented that removes the possible leakage and has an additional terminal condition with respect to one of the stock variables. © 2007 Society for Policy Modeling

Trade Liberalization and Taxation: A Multi-Sector Dynamic CGE Model for the United Arab Emirates

This paper develops a forward looking, multi-sector, dynamic computable general equilibrium model with oil for the United Arab Emirates. The model addresses three issues. The first is trade liberalization, where the UAE unilaterally lowers import taris. This has a favorable impact on welfare as domestic production is expanding, although labor-intensive sectors face a cost disadvantage and they are shrinking. The second issue, government revenue diversification, is simulated by increasing the indirect tax rate on goods to make the government less dependent on oil. This has an adverse effect on welfare as the economy is shrinking and production shifts from domestic production to exports, especially for labor-intensive sectors. Finally, a higher oil price has a favorable impact on welfare and overall, the economy is expanding, but more because of increased consumption and less because of increased production. This paper is the first attempt to address these issues in a dynamic forward looking general equilibrium context of the UAE and the Arab Gulf region

Shifting Non-Work related Benefits to Work-Related Benefits to resolve the Unemployment of Locals in a Typical Oil-Rich Gulf Country

The government of the United Arab Emirates (UAE) is sharing the oil wealth with the local population through various generous subsidies. Most nationals work for the government and compared to the private sector their salaries are far better, they have better working hours and more vacation days. A large pool of low wage migrant workers is active within the country. These two combined lead to unemployment of locals as they cannot compete in the private sector with the low wage migrant workers. Unemployment in 2008 amounts to 38, 186 Emiratis, out of the Emirati labor force of 468, 215. There is no unemployment of non-nationals as they leave the country if they are out of a job and cannot find another job. We conduct a possible cost-neutral policy experiment aimed at increasing the low levels of employment of nationals. Part of the non-work related benefits to the local population are shifted to work-related benefits. The general subsidy to nationals is reduced by 1.0% and this allows for a wage subsidy of 0.9%. The effects of this experiment are analyzed using a multi-sector forward-looking dynamic computable general equilibrium (CGE) model and lead to an immediate drop of unemployment by 4.26%. Over time unemployment settles at a value that is 4.37% lower than its base run value. This is the first attemp to create an forward-looking multisector model for the Gulf region

Time requirements for administrative activities; an investigation into firm size effects

This paper examines the assumption that activity time is independent of firm size (measured by the number of employees). Existing theories on (dis)economies of scale and scope and wage differentials are unclear on what to expect. For relatively complex activities such as becoming familiar with information obligations or checking agreements and declarations, the activity time might be related to the number of employees. For activities such as receiving, copying and sending information and documents, no theoretical arguments have been identified that suggest a firm-size effect. For the empirical examination of the existence of a relationship between firm size and activity time, data is used that were gathered in two projects applying the MISTRAL approach. This results in a dataset with information on many different activities, with only a few observations for each activity. By using a relative measure for activity time, observations for different activities can be combined in the analysis. To this end, relative activity time is defined as the ratio between the measured activity time and the standardized activity time for a certain activity. The empirical results suggest that, within the examined policy areas, firm size has no noticeable relationship with activity times. First of all, there exists no significant difference in average relative activity time between firms of different size classes. There are also no significant correlations between these variables. Next, these results are confirmed by regression analysis, where relative activity time is estimated as a function of firm size and other variables that might be of influence on activity time (such as experience of employees, the presence of a specific department for administrative activities, and whether additional adaptations and/or computations are required for a specific activity). Relative activity time tends to be higher for activities that require additional adaptations, but is independent of the size of the firm.

ECLAIRE: Effects of Climate Change on Air Pollution Impacts and Response Strategies for European Ecosystems. Project final report

The central goal of ECLAIRE is to assess how climate change will alter the extent to which air pollutants threaten terrestrial ecosystems. Particular attention has been given to nitrogen compounds, especially nitrogen oxides (NOx) and ammonia (NH3), as well as Biogenic Volatile Organic Compounds (BVOCs) in relation to tropospheric ozone (O3) formation, including their interactions with aerosol components. ECLAIRE has combined a broad program of field and laboratory experimentation and modelling of pollution fluxes and ecosystem impacts, advancing both mechanistic understanding and providing support to European policy makers. The central finding of ECLAIRE is that future climate change is expected to worsen the threat of air pollutants on Europe’s ecosystems. Firstly, climate warming is expected to increase the emissions of many trace gases, such as agricultural NH3, the soil component of NOx emissions and key BVOCs. Experimental data and numerical models show how these effects will tend to increase atmospheric N deposition in future. By contrast, the net effect on tropospheric O3 is less clear. This is because parallel increases in atmospheric CO2 concentrations will offset the temperature-driven increase for some BVOCs, such as isoprene. By contrast, there is currently insufficient evidence to be confident that CO2 will offset anticipated climate increases in monoterpene emissions. Secondly, climate warming is found to be likely to increase the vulnerability of ecosystems towards air pollutant exposure or atmospheric deposition. Such effects may occur as a consequence of combined perturbation, as well as through specific interactions, such as between drought, O3, N and aerosol exposure. These combined effects of climate change are expected to offset part of the benefit of current emissions control policies. Unless decisive mitigation actions are taken, it is anticipated that ongoing climate warming will increase agricultural and other biogenic emissions, posing a challenge for national emissions ceilings and air quality objectives related to nitrogen and ozone pollution. The O3 effects will be further worsened if progress is not made to curb increases in methane (CH4) emissions in the northern hemisphere. Other key findings of ECLAIRE are that: 1) N deposition and O3 have adverse synergistic effects. Exposure to ambient O3 concentrations was shown to reduce the Nitrogen Use Efficiency of plants, both decreasing agricultural production and posing an increased risk of other forms of nitrogen pollution, such as nitrate leaching (NO3-) and the greenhouse gas nitrous oxide (N2O); 2) within-canopy dynamics for volatile aerosol can increase dry deposition and shorten atmospheric lifetimes; 3) ambient aerosol levels reduce the ability of plants to conserve water under drought conditions; 4) low-resolution mapping studies tend to underestimate the extent of local critical loads exceedance; 5) new dose-response functions can be used to improve the assessment of costs, including estimation of the value of damage due to air pollution effects on ecosystems, 6) scenarios can be constructed that combine technical mitigation measures with dietary change options (reducing livestock products in food down to recommended levels for health criteria), with the balance between the two strategies being a matter for future societal discussion. ECLAIRE has supported the revision process for the National Emissions Ceilings Directive and will continue to deliver scientific underpinning into the future for the UNECE Convention on Long-range Transboundary Air Pollution

ECLAIRE third periodic report

The ÉCLAIRE project (Effects of Climate Change on Air Pollution Impacts and Response Strategies for European Ecosystems) is a four year (2011-2015) project funded by the EU's Seventh Framework Programme for Research and Technological Development (FP7)

Dynamic general-equilibrium model of an open economy: A comment

The model developed by Devarajan and Go [Devarajan S., & Go S. (1998). The simplest dynamic general-equilibrium model of an open economy. Journal of Policy Modeling, 20(6), 677-714] presents the simplest possible general-equilibrium model of an open economy in which producers' and consumers' decisions are both intra-and inter-temporally consistent. Unfortunately, there is possible leakage in that imported capital goods are taxed twice, yet these taxes do not show up fully in the government's budget constraint. Additionally, one of the proposed terminal conditions is implied by the other equations because of Walras' Law. Therefore, the model description is lacking an appropriate terminal condition. In this paper an alternative set of equations is presented that removes the possible leakage and has an additional terminal condition with respect to one of the stock variables.Dynamic CGE Open economy

Trade Liberalization and Economic Diversification: A Dynamic CGE Model for The Economy of Qatar

This paper develops a dynamic computable general equilibrium (CGE) model for Qatar with the view of getting some insights into the working of this a small open oil dependent economy. The model addresses three important issues that will determine the future path of Qatar economy. First, the issue of the oil price and its impact on the economy. Second, the issue of economic diversification away from oil. Third, the issue of trade liberalization in view of WTO agreement, the custom union within the GCC block, the planned GCC bilateral free trade agreement (FTA) with the EU and the US and the Greater Arab FTA. The impact of oil is simulated by an increase in the world price of oil. Economic diversification is simulated by an introduction of a value added tax (VAT) that diversifies government revenue and makes it less dependent on oil. Trade liberalization is simulated by a reduction of the external import tariff. The model results indicate that the increase of the price of oil and trade liberalization lead to a substantial favorable outcome in term of both GDP and wealth. On the contrary, the introduction of the VAT has an adverse impact on both GDP and wealth. As the aim of the VAT is to make the governments less dependent on oil, it turns out that the VAT decreases the tax base as it leads to the shrinking of the economy and, overall, the government collects even less taxes. This paper is the first attempt of its kind to address these issues in a dynamic general equilibrium context for Qatar and the Arab Gulf region. In addition, the data collected to calibrate the model provides a consistent set of data for the Qatar economy that is not being developed before