Designing Efficient Policies in a Regional Economy. A MCDM-CGE Approach
AbstractSince policy makers usually pursue several conflicting objectives, policy making can be understood as a multicriteria decision problem. Following the methodological proposal in André and Cardenete (2005), we use multiobjective programming in connection with a computable general equilibrium model to represent optimal policy making and to get so-called efficient policies in an application to a regional economy (Andalusia, Spain). We illustrate the solution of two bicriteria problems (unemployment vs. inflation and growth vs. unemployment) from which we get a new reading of two classical results: the Phillips curve and the Okun law. Finally, we enlarge the scope of the exercise by solving a problem with five objectives and discuss the efficient solutions that can be obtained in this context.
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Bibliographic InfoPaper provided by Centro de Estudios Andaluces in its series Economic Working Papers at Centro de Estudios Andaluces with number E2006/03.
Length: 28 pages
Date of creation: 2006
Date of revision:
Public Policy; Multicriteria Decision Making; Computable General Equilibrium Model; Efficient Policy.;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-02-19 (All new papers)
- NEP-CMP-2006-02-19 (Computational Economics)
- NEP-GEO-2006-02-19 (Economic Geography)
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- Francisco J. André & M. Alejandro Cardenete, 2009. "Efficient Economic and Environmental Policies Combining Multicriteria Techniques and General Equilibrium Modelling," Working Papers 09.08, Universidad Pablo de Olavide, Department of Economics.
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