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Journal of Economic Interaction and Coordination

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01.10.2014 | Regular Article

A multi-agent model of a low income economy: simulating the distributional effects of natural disasters

verfasst von: Ali Asjad Naqvi, Miriam Rehm

Erschienen in: Journal of Economic Interaction and Coordination | Ausgabe 2/2014

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Abstract

This paper develops an agent-based model of a stylized low income region in order to study the impact of natural disasters on population displacement, income, prices, and consumption with a focus on distributions and coping strategies of low income groups. Key features of the model include the integration of decentralized markets into a full economy in a spatially explicit way and the analysis of short-run adjustment processes. The model is calibrated to a low income region of rural agrarian Pakistan that faced severe floods in 2010. Dynamic adaptation by agents in response to falling income includes migrating and running down savings. Despite these consumption smoothing strategies, some low income groups are vulnerable to starvation. The paper showcases two hypothetical policy scenarios, a cash and a food transfer program, and tracks their effects on the welfare of low income groups in the economy.

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See also Naqvi (2012b) and Naqvi and Rehm (2014).

The tradeable good is assumed to have no minimum consumption level and therefore depends only on income with a low value of \(\bar{\alpha }_{G}\), the marginal propensity to consume the tradeable good.

Endogenous risk preference is explored in Naqvi (2012a) in an extension of the SHELscape model.

An agent-based framework incorporating spatial family networks and various determinants of migration are explored in Rehm (2012).

See Appendix 2 for details on the normalized distance matrices.

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Titel: A multi-agent model of a low income economy: simulating the distributional effects of natural disasters
verfasst von: Ali Asjad Naqvi
Miriam Rehm
Publikationsdatum: 01.10.2014
Verlag: Springer Berlin Heidelberg
Erschienen in: Journal of Economic Interaction and Coordination / Ausgabe 2/2014
Print ISSN: 1860-711X
Elektronische ISSN: 1860-7128
DOI: https://doi.org/10.1007/s11403-014-0137-1

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