The distributional impact of macroeconomic shocks in Mexico: threshold effects in a multi-region CGE model

This paper presents a regionally disaggregated computable general equilibrium (CGE) model of Mexico in order to examine the differential effects of external shocks across the regions. The model demonstrates how the internal migration regime is affected by exogenous changes in the presence of threshold effects, in which an exogenous change may not effect regional behavior until the shocks are large enough to overcome the isolation of local markets. The results show that migration helps mitigate the income changes caused by the simulations.Equilibrium (Economics) Econometric models., Equilibrium (Economics) Simulation methods., Migration, Internal.,

A computable general equilibrium analysis of Mexico's agricultural policy reforms

Since the late 1980s, Mexico has liberalized its agricultural sector, moving from a system of price supports, producer subsidies and consumer subsidies to a less distorting scheme in which market forces play a greater role. Coinciding with these agrarian and food policy reforms, the government has implemented the PROCAMPO system of direct payments to farmers. There is a general consensus that a direct payment program has the potential to be more efficient than a system of subsidies and supports. At the same time, there is widespread agreement that other policies need to be put in place to assure protection of the economically vulnerable segments of the population. Within this context, this paper uses a computable general equilibrium (CGE) model to analyze the regional, household and economy-wide effects of switching from the old system of price supports and subsidies to the new system of PROCAMPO payments. A CGE model of Mexico is constructed with four rural regions and one urban region and a high disaggregation of the agricultural and food sectors. It also includes 15 households, defined according to region and income level to permit a rich analysis of distribution effects. The initial experiment consists of removing the PROCAMPO payments from the base year (1996) and adding back the subsidy and support scheme as it existed in 1993, the year before PROCAMPO began. Then two policies are tested under an exchange rate depreciation to see how each policy regime reacts to adverse shocks. The simulations demonstrate that in a static situation, lump sum payments are preferred to the system of subsidies and price supports. In the event of a negative external shock, the simulations suggest that the old system performs better in terms of output and rural incomes. However, urban households are worse off, and their size in total population may make this an unattractive policy.

Economy-wide effects of El Niño / Southern Oscillation (ENSO) in Mexico and the role of improved forecasting and technological change

Weather fluctuations, such as those caused by the El Niño Southern Oscillation (ENSO), add to the riskiness associated with agricultural production. Improved predictive capacity may help ameliorate negative impacts of climate and weather shocks on agriculture, but it is possible that the benefits of an improved forecast will be distributed unevenly. In particular, poor farmers may not have access to improved forecasts, or they may not have the means to adapt to new weather information. This paper uses a stochastic computable general equilibrium (CGE) model to examine the distributive effects of improved forecasting of ENSO in Mexico. The particular focus is on agriculture, one of the most vulnerable sectors in the face of ENSO, as well as a sector which provides income to many of the country's poorest households. The model is used to investigate the responsiveness of various sectors of the economy under different degrees of improved predictive capacity and improvements in agricultural technology....The results show that while agricultural losses are small as a share of the overall economy, improved forecasting techniques can eliminate these lossesStochastic analysis ,Agriculture Environmental aspects Mexico ,Climatic changes Models ,Agricultural productivity ,Forecasting ,TMD ,

Computational Dynamics of a 3D Elastic String Pendulum Attached to a Rigid Body and an Inertially Fixed Reel Mechanism

A high fidelity model is developed for an elastic string pendulum, one end of which is attached to a rigid body while the other end is attached to an inertially fixed reel mechanism which allows the unstretched length of the string to be dynamically varied. The string is assumed to have distributed mass and elasticity that permits axial deformations. The rigid body is attached to the string at an arbitrary point, and the resulting string pendulum system exhibits nontrivial coupling between the elastic wave propagation in the string and the rigid body dynamics. Variational methods are used to develop coupled ordinary and partial differential equations of motion. Computational methods, referred to as Lie group variational integrators, are then developed, based on a finite element approximation and the use of variational methods in a discrete-time setting to obtain discrete-time equations of motion. This approach preserves the geometry of the configurations, and leads to accurate and efficient algorithms that have guaranteed accuracy properties that make them suitable for many dynamic simulations, especially over long simulation times. Numerical results are presented for typical examples involving a constant length string, string deployment, and string retrieval. These demonstrate the complicated dynamics that arise in a string pendulum from the interaction of the rigid body motion, elastic wave dynamics in the string, and the disturbances introduced by the reeling mechanism. Such interactions are dynamically important in many engineering problems, but tend be obscured in lower fidelity models.Comment: 17 pages, 14 figure

Evaluating targeted cash transfer programs: a general equilibrium framework with an application to Mexico

This report focuses on the indirect and direct effects of transfer programs. In particular, it shows how modelling results can be combined with information from standard household surveys to provide an integrated analysis of the direct distributional impact of such programs and the indirect distributional and efficiency impacts arising from domestic financing mechanisms. This approach reflects the view that any credible poverty alleviation strategy must have a credible financing strategy underlying it, and this need for domestic financing can have important consequences for both the level and the distribution of household incomes. To illustrate the approach, the report focuses on the recent introduction in Mexico of an innovative poverty alleviation transfer program called PROGRESA, which has been used as a prototype for similar programs that have recently been implemented in other developing countries.Economic assistance, Domestic Mexico Evaluation, Public welfare - Mexico Evaluation,

Optimal Control of a Rigid Body using Geometrically Exact Computations on SE(3)

Optimal control problems are formulated and efficient computational procedures are proposed for combined orbital and rotational maneuvers of a rigid body in three dimensions. The rigid body is assumed to act under the influence of forces and moments that arise from a potential and from control forces and moments. The key features of this paper are its use of computational procedures that are guaranteed to preserve the geometry of the optimal solutions. The theoretical basis for the computational procedures is summarized, and examples of optimal spacecraft maneuvers are presented.Comment: IEEE Conference on Decision and Control, 2006. 6 pages, 19 figure