celerina-andeana
Uploaded by
39 SLIDES
537 VUES
390LIKES

Exploring a Calibrated Solow Model for Argentina: Insights from 1950 SAM Analysis

DESCRIPTION

This paper presents a calibrated Solow model based on a Social Accounting Matrix (SAM) from 1950, focusing on a counterfactual structuralist framework. The model, designed in Excel for transparency, incorporates systematic assumptions including capacity utilization and aggregate demand shocks. Analyzing labor dynamics, it distinguishes between skilled and unskilled labor, accounting for education and experience. Key findings reveal the historical trends and effects of fiscal policy in Argentina, indicating a transition towards government failure and highlighting household decision-making under different economic scenarios.

1 / 39

Télécharger la présentation

Exploring a Calibrated Solow Model for Argentina: Insights from 1950 SAM Analysis

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Solow Model • Calibrated to a SAM for 1950 • Usual assumptions • Written in Excel for transparency (instead of GAMS) • Interpretation and changes are straightforward • Produces a counterfactual

  2. Structuralist Model • Calibrated to the same SAM • Uses capacity generated by Solow model

  3. Investment function • u: capacity utilization u = X/Q • X: aggregate demand • Expected rate of profit relative to the cost of capital

  4. Expected profit rate Last period’s profit rate plus a random error term (uniform distribution) rt = rt-1+ ε

  5. Aggregate Demand • X = X(u; ρ*,ρ)+εwhere • ρ∗ foreign savings • ρ govt investment less govt savings • ρ* and ρ are “shocks” (in terms of % of GDP) • Supply determined by Solow model

  6. Labor Market • Supply: exogenous growth rate • Demand: follows productivity and real wages • Walrasian adjustment with lag

  7. The Shocks Two ways to model them • Historical trend (average rate of growth) • Actual data (year by year)

  8. Trend shocks

  9. Actual Foreign (trend fiscal)

  10. Actual Fiscal and Foreign

  11. Conclusion • Fiscal policy stabilizing until late 1980s- 1990s. • Se vayan todos: classic government failure ∙ • Argentina and Washington Consensus

  12. Households • 75 households (1950) to 234 households (2000) • Two labor categories: Skilled and unskilled

  13. To enter the skilled labor market • Requires “skill” obtained through • Education or previous experience • Luck

  14. Points system • All labor contracts are renegotiated each period • Education one point • Experience Lt = 1+(1/Lt-1) • Recent experience (last period) • Luck (according to a random variable)

  15. Household Decision Rules

  16. Employer’s Decision

  17. Simulation Design • Excess supply of skilled labor • Some skilled labor bias built into the model • A worker without skill can at best equal a worker with skill (never preferred).

  18. Trend shocks with HH block

  19. Trend Fiscal Actual Foreign

  20. Income Distribution

More Related