1st Lecture - Blog Staff · 1st Lecture Rus’an Nasrudin ... Outline De ne Economic Model...
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OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
1st Lecture
Rus’an NasrudinEconomic Modelling/ECON 11002
February 12, 2013
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
1 Define Economic ModelDefinitionReason
2 Simple-Ilustration
3 Stochastic vs Deterministic
4 OverviewIO ModelSAM ModelCGE ModelAHP
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
DefinitionReason
Definition
Simple theoretical description that capture the essentials of howthe economy works. (Nicholson & Snyder, 2010).
Are simplified versions of a more complex reality and are used toshow relationship between variables, explain the economysbehavior, devise policies to improve economics performance(Mankiw, 2011).
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
DefinitionReason
Why do we make model?
Real world is complex economic system to be illustrated indetail
Can you give an example?
Does detail beneficial? Not always; some trivia.
We describe the system in unrealistic way but is aimed toexplain some economic question particularly.
Unrealistic way means that we need assumptions.Particular finding from the model can be used to confirmtheory as long as it meet the requirements (i.e. assumptions)
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
Microeconomics
A question.What is the impact of an increase of individuals income whoconsume a commodity to:
Price
Quantity
How do we answer this question? Create an economic model.
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
Model #1
Assume that people are rational; non-satiated, and complete inmaking comparison between goods, well informed (no asymmetricinformation and so uncertainty), only two goods consumed byindividuals.We haveU = U(x , y)Individuals make decision asMax U = U(x , y) s.t. I = Pxx + PyySolve the problem using Lagrangian method for Marsahalliandemand.
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
Model #1..
If e.g. U = xαyβ then we have:x∗(Px ,Py , I ) = α
α+βIPx
and
y∗(Px ,Py , I ) = βα+β
IPy
At this point we know that:
For normal good consumption is decreasing in price; but
Increasing in income
Now, can you demonstrate and ilustrate the model graphically?See the mathcad exercise.
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
Macroeconomics
On of the influencing theory in macroeconomics about growth isthe Solow growth model. Redrawing the theory, we know that:In aggregate term we express the economic activity as productionof goods by firms:Y = F (K , L)Since we are concerning welfare, we express as percapita term:YL = F (K , 1)Rewrite as small caps:y = f (k)
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
Model #2
Another important identity that we are assuming:y = c + i ; andi = sy ; andi = sf (k)And we know the famous growth formula of Solow Model as:∆k = sf (k) − δkIn particular we also know that the steady state:∆k = sf (k) − δk = 0Graphical representation: see Mathcad Exercise.
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
Our Focus
Since our course provides alternatives economic modelling tostochastic courses (e.g. econometric), we are focusing on thedeterministic models.
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
Benchmark Models in This Course
Input-Output Model, includes combination with stochastic(Hybrid Model)
Intro to Sistem Neraca Sosial Ekonomi/ SNSE atau SocialAccounting Matrix SAM
Simple Computable General Equilibrium (CGE) Model
Analytical Hierarchy Process (AHP)
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
What is IO?
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
The model’s engine?
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
The coefficient
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
The use
See demonstration in class of one of the application.
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
Basic Concept
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
Basic Concept
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
Basic Concept
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
Basic Concept
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
Basic Concept
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
The Use
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
What is CGE Model
Model yang biasa digunakan untuk mengestimasi berbagaiskenario simulasi kebijakan atau Model Keseimbangan Umum
Model ini mendasarkan pada Teori Keseimbangan Umum yangmerupakan formalisasi dari observasi bahwa pasar dalamkenyataannya saling terkait.
Perubahan dalam kondisi permintaan atau penawaranbiasanya merupakan reaksi dari keseimbangan harga padabeberapa pasar lainnya.
Arrow (2005) menyebutkan bahwa “dalam semua kasusdimana akibat dari kebijakan sangat luas, tidak terdapatalternatif lain selain CGE”.
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
Structure
Struktur teorinya merupakan tipikal dari model keseimbanganumum statis yang terdiri dari persamaan-persamaan yangmenjelaskan hubungan antar, misalnya:
1 permintaan input faktorproduksi oleh industri;
2 penawaran komoditas;
3 permintaan input untukpembentukan modal;
4 permintaan rumah tangga;
5 permintaan untuk ekspor;
6 permintaan pemerintah;
7 keterkaitan antara nilaidasar terhadap biayaproduksi dan hargaprodusen;
8 kondisi pasar kliring untukkomoditas-komoditas danfaktor-faktor primer; dan
9 sejumlah variabel ekonomimakro
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
What is AHP?
Analytic Hierarchy Process (AHP) adalah Metodepengambilan keputusan dengan cara memecah suatu masalahyang kompleks dan tidak terstruktur ke dalam kelompokkelompok, dan mengaturnya kedalam suatu hirarki yangdikembangkan oleh Thomas L. Saaty. Metode AHP dapatdigunakan sebagai alat untuk menentukan prioritas sebuahpermasalahan atau kebijakan.
Metode ini juga menggabungkan kekuatan dari perasaan danlogika yang bersangkutan pada berbagai persoalan, lalumensintesis berbagai pertimbangan yang beragam menjadihasil yang cocok dengan perkiraan kita secara intuitifsebagaimana yang dipresentasikan pada pertimbangan yangtelah dibuat(Saaty, 1993).
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
What is AHP...?
Dengan kata lain, AHP adalah salah satu bentuk modelpengambilan keputusan yang menggunakan presepsi manusiayang dianggap ahli (orang yang mengerti permasalahan yangdiajukan atau orang yang mempunyai kepentingan terhadapisu atau permasalahan yang diajukan) sebagai inpututamanya. Kelebihan model AHP dibandingkan modelpengambilan keputusan lainnya terletak pada kemampuanmemecahkan masalah yang multiobjectives dan multicriterias.
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture
OutlineDefine Economic Model
Simple-IlustrationStochastic vs Deterministic
Overview
IO ModelSAM ModelCGE ModelAHP
Terdapat empat tahapan dalam penggunaan teknik AHP:
1 Mendefinisikan suatu “aktivitas” yang memerlukan pemilihandalam pembuatan skala prioritasnya.
2 Menentukan kriteria dari pilihan-pilihan tersebut didasarkanpada identitas aktivitas pembuat hirarkinya atau elemen.
3 Membuat matriks perbandingan berpasangan denganmemperhatikan prinsip comparative judgement dalam rangkamenyusun prioritas tiap elemen pada tiap hirarki. Matriks inidisusun dalam bentuk bobot relatif yang dinormalkan(normalized relative weight).
4 Melakukan uji konsistensi perbandingan elemen pada tiaphirarki dan dilanjutkan dengan uji konsistensi hirarki.
Rus’an NasrudinEconomic Modelling/ECON 11002 1st Lecture