Consumption Allocation Decisions Research Articles

The effects of alternative wage regimes in a monetary union: A multi-country agent based-stock flow consistent model

The Eurozone crisis has revitalized the debate between economists on the role played by wages in open economies. Salaries paid to workers are at the same time a fundamental source of aggregate demand and a determinant of firms’ international cost competitiveness. The paper investigates how alternative wage growth patterns impact on the economic dynamics of an artificial Monetary Union. For this sake, we perform several experiments employing the Agent Based-Stock Flow Consistent (AB-SFC) Multi-Country model first presented in Caiani et al. (2018a).Results show that a change in the wage growth pattern impacts in non-trivial ways on the demand and supply sides of the economies, giving rise to Keynesian and Schumpeterian effects. When occurring in a single country, wage expansions lead to a transitory deterioration of the country current account and to a slow-down of the economy in the short-run. However, on a longer time-span, higher wages tend to improve firms’ innovative performance by strengthening the process of Schumpeterian competition, providing long-run benefits in terms of higher labor productivity which allow the economy to recover. Conversely, a coordinated expansion of wages in all countries, which leaves their relative competitive position unaffected, tends to benefit real GDP, labor productivity growth, and countries’ public finance, while not affecting unemployment and countries’ external balance. A specular dynamics characterizes the experiments investigating the effects of wage moderation.Extensive sensitivity experiments show that these results are robust to different dimensions of the Monetary Union and that the efficacy of coordinated wage expansionary strategies is enhanced when consumers give more importance to price differentials in their consumption allocation decisions.

The Effects of Alternative Wage Regimes in a Monetary Union: A Multi-Country Agent Based-Stock Flow Consistent Model

The eurozone crisis has revitalized the debate between economists on the role played by wages in open economies. Salaries paid to workers are at the same time a fundamental source of aggregate demand and a determinant of firms' international cost competitiveness. After presenting the most relevant positions regarding the role of wages in the eurozone crisis, the paper investigates the impact of alternative wage growth patterns in an artificial Monetary Union, by means of simulation experiments conducted with the Agent Based-Stock Flow Consistent (AB-SFC) Multi-Country model presented in Caiani et al. (2017a). Changes in wage growth regimes impact in non-trivial ways on both the demand and supply sides of the economies, combining Keynesian and Schumpeterian effects. When pursued in isolation, both wage inflation and wage moderation strategies are characterized by a trade-off between the external and fiscal stance of the country and the dynamics of real GDP and labor productivity. On the contrary, coordinated wage increases in all member countries benefit the economy without compromising the external balance. Sensitivity experiments show that results are robust to different dimensions of the Monetary Union and that the efficacy of coordinated wage inflationary strategies is enhanced when consumers give more importance to price differentials in their consumption allocation decisions.

Utilitarianism, prioritarianism, and intergenerational equity: A cake eating model

We use a simple consumption model, the so-called cake eating model, to study the interaction of equity, time and risk in social decision making. Total consumption, the “cake”, is uncertain. The social planner allocates consumption between two agents (representing two generations), by assigning the first a determinate amount, with the second receiving the risky remainder. We study this consumption allocation decision using three social welfare functions: utilitarianism, ex ante prioritarianism, and ex post prioritarianism. Under standard assumptions, ex ante prioritarianism allocates more consumption to the first generation than utilitarianism. Thus, a concern for equity, in the ex ante prioritarian sense, means less concern for the risky future. By contrast, ex post prioritarianism normally chooses less consumption for the first generation than utilitarianism. We discuss the robustness of these optimal consumption allocations to learning and to more complicated social welfare functions.

Capital accumulation and the sources of demographic change

We develop a neoclassical growth model having a realistic demographic structure. We identify the critical channel of impact to be the intertemporal consumption allocation decision through the “generational turnover term”. Expressing the aggregate dynamics as a generalization of the conventional neoclassical growth model provides important insights, enabling us to view in a unified way how alternative demographic structures impinge on the macrodynamic equilibrium. Using an approximation to the generational turnover term, we are able to characterize both the steady state and the local transitional dynamics. Through numerical simulations, we analyze the steady state as well as the transitional effects of structural and demographic changes.

Analyzing the Distribution of Energy Consumption of Coagulation Technological Using the Fractal Dimension

Using self-made high-ferric-based silicon coagulant to deal with the lead containing industrial wastewater. Firstly we can define the optimum dosage of coagulant by jar test, and then utilize orthogonal experiment to seek the best energy consumption allocation decision at different levels. Combining with the fractal dimension of flocs, it can directly reflect the flocs growth of each stage in the distribution of energy consumption, and can guide the operating conditions of coagulation technology. This method not only makes water treatment economical and efficient, but also offers the comparatively scientific design data for the design of the flocculation tank in water works.

Application of lead flocs fractal dimension by new poly-ferric-silicon coagulant

Poly-ferric-silicon, made by the fly ash extract, is well in dealing with the lead industrial wastewater. Meanwhile combed with the application of fractal theory in coagulation, the test is conducted the jar test in different dosages and pH value, and found that the fractal dimension of flocs and the lead removal after precipitation can be showed a good correlation, so this is achieved the online monitoring the coagulation effect by flocs fractal dimension. Additionally, in order to assure the optimal hydraulic condition of the new type poly-ferric-silicon coagulant, the test is utilized orthogonal experiment to seek the best hydraulic energy consumption allocation scheme which is G1 = 67.7 s–1, t = 3 min, G2 = 57.8 s–1, t = 5 min, G3 = 23.9 s–1, t = 7 min by dividing the stirring intensity (G value) and stirring time (t value) into different three gears in flocculation stage. and got the appropriate flocs fractal dimension being 1.48, 1.66 and 1.80 in each stage of the distribution of energy consumption. So combing the energy consumption allocation scheme with fractal dimension, it not only be effectively illustrated the rational of the energy consumption allocation decision, but also offered the comparatively scientific design data for designing of the flocculation tank, being made the water treatment economical and efficient.