Browsing by Author "Rege, Sameer"
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- Analysing the impacts of closure of a military base using a dynamic CGE modelPublication . Bayar, Ali; Mohora, Cristina; Fortuna, Mário; Rege, Sameer; Sisik, SuatMilitary bases are commonplace in many countries and may have a significant impact in the communities where they are integrated. Impacts of military bases have been analysed through different perspectives. Our aim is to analyse their economic impact. The importance of military bases has become a topic of discussion particularly when base closures or base activity reductions are under consideration. In a previous paper the authors looked at the issue using a static CGE model applied to the analysis of the economic impact of a US base located in the island of Terceira in the Azores. In the current paper a dynamic model is used to study the same issue, using more recent data and disaggregating the impact among different household categories. A base closure scenario is created and the impacts traced through various economic indicators. It is concluded that GDP falls, relative to the base scenario for a number of years recovering after some time, assuming that worsened trade balances are compensated by other transfers. This fall is prompted by a fall in employment, personal income and consumption. The model also predicts that the impact hurts different household income groups with diverse intensity. Lower income households are hurt more in relative terms but generate a smaller absolute impact. With time, the negative impact tapers off for most income groups except for the lowest which keeps on loosing more until the end of the simulation period.
- Comparing the generalised hyperbolic and the normal inverse Gaussian distributions for the daily returns of the PSI20Publication . Rege, Sameer; Menezes, António Gomes deThe presence of non-normality, fat-tails, skewness and kurtosis in the distribution of the returns necessitates the fitting of distributions that account for this phenomenon. We fit the Generalized Hyperbolic Distribution and the Normal Inverse Gaussian to the daily returns from the Portuguese Stock Index, the PSI20. We use the EM algorithm for estimating the parameters of the Normal Inverse Gaussian while those of the Generalized Hyperbolic distribution are estimated using the Nelder-Mead algorithm. We find that the Generalized Hyperbolic is a better fit than the Normal Inverse Gaussian as it better estimates the probabilities at the left tail where the losses are concentrated.
- Computable general equilibrium models : theory and applicationsPublication . Fortuna, Mário; Rege, SameerThe book is divided into two parts. The first part deals with the theory of general equilibrium and microeconomics necessary for any student to appreciate the derivation of the equations used in the models. It gives a brief overview of static and dynamic general equilibrium models with an objective of juxtaposing both to enable the novice reader to quickly grasp the benefits of different models. It also gives working programs in GAMS and R to play around with the parameters and appreciate the interplay between the parameters and model results and the limitations. We emphatically state that this is but a very very elementary introduction and meant only as a pre-cursor to the world of economic modelling. The second part deals with the main objective of the book, the dynamic general equilibrium model for the Azores and the various policy simulations from the model. Initially it explains in detail the model equations and the Social Accounting Matrix and then outlines the simulation results obtained from the model.
- The daily returns of the Portuguese stock index : a distributional characterizationPublication . Rege, Sameer; Teixeira, João; Menezes, António Gomes deThis paper compares the fitting of the normal, generalized hyperbolic, normal inverse Gaussian and Student t distributions to the daily returns of the Portuguese Stock Index PSI-20 over the period 1992-2013. We find that the distribution of the actual returns of the PSI-20 exhibits much higher kurtosis and extreme values as compared to the normal distribution. Overall, the best fit is provided by the Student t and the generalized hyperbolic distributions. This pattern also applies to the tail behavior, as the density of the Student t distribution exhibits fatter tails then the density of the other distributions, followed by the density of the generalized hyperbolic distribution. Finally, we find that the normal inverse Gaussian and the normal distributions have the lowest fitting quality to the actual daily returns of the Portuguese stock index.
- Estimating the impacts of eliminating fisheries subsidies on the small island economy of the AzoresPublication . Fortuna, Mário; Carvalho, Natacha; Rege, SameerSubsidies that reduce the costs incurred by fishers and increase profits for the industry can insulate fishers from economic signals, countering the economic incentive to stop fishing when it is unprofitable. Subsidies can thus be a major impediment to achieving economically productive fisheries, exacerbating overexploitation and delaying the necessary industry adjustments, particularly in the absence of effective management systems. Although some fisheries are profitable without government support, several studies have shown that many European fishing fleets are either running losses or returning low profits. In most cases operating costs are higher than gross revenue, resulting in a negative net contribution of fisheries to the economy, the deficit of which is largely funded by subsidies. Thus the cost of fishing to the public budget exceeds the total value of the catches. Recently, fishery subsidies have received much attention with a mounting literature on the urgent need to reduce capacity-enhancing subsidies and begin focusing on developing a profitable and sustainable industry that can adapt to changing economic and environmental conditions. Simple economic models showing how subsidies affect profits and therefore provide incentives for increased fishing effort have accompanied a number of overviews of subsidies published by leading intergovernmental and research institutions. A number of case studies have also illustrated the critical link between fleet capacity and subsidies and that some categories of subsidies are more distorting than others. However, most of the studies have been limited to estimating the value of these subsidies, and usually at the multinational or global level. None so far, to our knowledge, has estimated the economy-wide impact of reducing or eliminating fishing subsidies even though there is a growing consensus that subsidies should gradually be terminated. Moreover, the Fisheries Secretariat believes that capacity enhancing and fuel subsidies should be stopped immediately. Nonetheless, the new financial instrument of the CFP, the European Fisheries Fund (EFF 2007-2013), although an improvement on its previous homologous (FIFG 2000-2006), contains some ambiguous elements, which could open up for further increase of fishing capacity. A long-term approach is needed that encompasses more fundamental changes than using for example more efficient engines that initially reduce fuel consumption but in the long-run worsen the situation by contributing to increasing fishing effort on already overexploited stocks. On account of the global fisheries crises, highly subsidised fisheries and the anticipated reforms of the CFP, this study aims at estimating the impact of eliminating cost-reducing and capacity-enhancing fisheries subsidies on the Azorean economy. In particular, this study sets out to measure the impact of such a shock on various macro and micro variables pertaining to the regional economy using a dynamic CGE model based on a SAM for the Azores.
- Estimating the impacts of eliminating fisheries subsidies on the small island economy of the Azores.Publication . Carvalho, Natacha; Rege, Sameer; Fortuna, Mário; Isidro, Eduardo; Edwards-Jones, GarethA major problem affecting world fisheries today is overcapacity of which overfishing is both a cause and a consequence. There is a general consensus that fisheries subsidies cause great harm to the resource by exacerbating the problems resulting from the common resource issues of fisheries leading to overexploitation of the resource through a new set of perverse incentives. Many now advocate that subsidies should gradually be terminated, and that capacity enhancing and fuel subsidies should be terminated immediately. On account of the global fisheries crises, highly subsidised fisheries and the anticipated reforms of the European Union's Common Fisheries Policy this study aimed to estimate the impact of eliminating fisheries subsidies on various macro and micro economic variables pertaining to the regional economy of the Azores using a dynamic computable general equilibrium model based on a social accounting matrix. The simulation results suggest that reduction, and in particular, elimination of fisheries subsidies would have a substantial effect on the region, however, the negative social and economic effects would be largely confined to the fishing sector. Conversely, the augmentation of fishery subsidies would benefit the fishing sector with an overall adverse effect on the rest of the economy..
- Impacts of closure of a military base on a small island open economyPublication . Fortuna, Mário; Bayar, Ali; Sisik, Suat; Mohora, Cristina; Rege, SameerMilitary bases are commonplace in many countries. Their economic impact on the neighbouring communities depends on their location and the level of integration of their activities on the local economies. Base closures or base activity reductions are also frequent as a consequence of military strategy alterations. The current paper seeks to analyse the economic impact of a US base located in the island of Terceira in the Azores. The base has been an important element of economic life in this island since the end of WWII. The changing geo-strategic map of the world has, along the second half of the twentieth century, led to changing roles of this base and consequent changes in the intensity of its activity. On the other hand discussions over the importance of the base for the local economy are recurrent in an attempt, on the part of the participants, to set forth arguments in favour or against the presence of military forces in the location. The current paper tries to contribute with a quantification of the economic impact of the base using a dynamic CGE model of the Azorean economy. A closure scenario is created and the impacts traced through various economic indicators including some sector detail. Estimates are made for the overall impact and for the impact on the island that houses the base.
- Welfare impacts of road construction using a public-private partnership : a CGE analysis of a projectPublication . Bayar, Ali; Fortuna, Mário; Rege, SameerThe Azorean Government embarked on a public-private partnership to build a road on the island of São Miguel, to circumvent the budget restriction imposed by the central government. We build a sequentially dynamic general equilibrium model with 45 sectors to measure the welfare changes arising from the project. The initial investment is amortised over a period and the payments are simulated through an increase in income taxes, reduction in transfer payments or calculating the fall in transport margins. We find that under any type of repayment scheme the welfare benefits do not justify the road construction thus making it a poor investment decision.
- Welfare implications of pension reforms in Portugal using an overlapping generations modelPublication . Rege, Sameer; Menezes, António Gomes deNeste artigo é proposto e desenvolvido um modelo de gerações sobrepostas (OLG) de 60 períodos, com vista a análise dos efeitos de bem-estar da redução de pensões associadas a diferentes alterações de impostos. O modelo é calibrado à economia portuguesa em 2005. Os resultados indicam que a redução das pensões sem alterações em impostos resulta num aumento da utilidade, de modo sensível à elasticidade de substituição na função de produção. O corte de pensões associado a um aumento da idade da reforma tem um impacto residual na utilidade, dada a suavização do perfil do consumo ao longo da vida. O corte de pensões com alterações (aumentos/reduções) em diferentes impostos como IVA tem maiores impactos no bem estar (aumentos/perdas) do por oposição a alterações em impostos sobre o capital. São discutidas implicações de política económica à luz da temática da sustentabilidade da segurança social em Portugal.