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An Application of the Von Neumann Model

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An Application of the Von Neumann Model STELLINGEN 1. In tegenstelling tot het optimaliseringsmodel dat de WRR gebruikt om de middellange termijn groeimogelijkheden van de Nederlandse economie te onderzoeken, heeft het Von Neumann model de volgende eigenschappen: (i) De relaties binnen het model hebben een duidelijke economische, technologische en/of institutionele betekenis. Er verschijnen geen niet of moeilijk te interpreteren ad hoe restricties als 'dei ex machina' op het (model-)toneel. (ii) Het model staat de specificatie van meerdere productietechnieken toe. Binnen de projectieperiode kunnen endogene wisselingen van produktietechniek optreden. (Ui) Het niveau van een (produktie-)activiteit in de modeluitkomsten wordt bepaald door haar relatieve economische aantrekkelijkheid; en niet door de bijdrage die geleverd wordt aan een doelfunctie die een zeer ongeloofwaardig gedrag van de achterliggende economische agenten impliceert, (iv) Het handelsregime van een goed (export, import, autarkie) is endogeen en kan binnen de projectieperiode wisselen. Onder andere om deze redenen verdient het Von Neumann model meer aandacht als instrument waarmee de middellange termijn groeimogelijk• heden van een economie kunnen worden geanalyseerd. WRR (1987): 'Ruimte voor groei'. Rapport 29, Staatsuitgeverij, 's-Gravenhage. Dit proefschrift. 2. De 'revolutie' die de hypothese van de rationele verwachtingen in de macro-economie heeft teweeg gebracht, doet nogal onevenwichtig aan als men beziet met welk een gemak er binnen diezelfde macro-economie geabstraheerd wordt van allerlei zeer relevante kenmerken van de economische werkelijkheid. Het feit dat er binnen de macro-economische modelbouw Qberhaupt geen sprake is van expliciet gedefinieerde econo• mische agenten is in dit verband wel het meest in het oog springend. David K.H. Begg (1984): 'The raüonal expectatióris* revolution in macro-economics'. Philip Allan Publishers, Oxford. 3. De door Veerman gebruikte argumenten in zijn kritiek op de 'gangbare (landbouw-)economische theorie' zijn deels onjuist; in zoverre ze juist zijn, zijn ze niet bruikbaar en bovendien inconsistent met zijn conclusies. De door hem bepleite 'grondige bezinning op de uitgangspunten van de landbouweconomie' kan daarom maar beter achterwege blijven. C.P. Veerman (1987): 'Over landbouweconomie en landbouwpolitiek'. Inaugurele rede, KUB, Tilburg. 4. De economische wetenschap wordt gekenmerkt door de (bijna) onmogelijk• heid tot het doen van experimenten onder gecontroleerde externe omstan• digheden en door een in het algemeen zeer matige kwaliteit van het beschikbare datamateriaal. Bij discriminatie en beoordeling van model en modeluitkomsten dienen daarom modelconsistentie en theoretische onderbouwing een belangrijker rol te spelen dan t-waarden, r-kwadraten en ex-post voorspelkracht. 5. Het ene algemene evenwichtsmodel is het andere niet. 6. Met behulp van een serieus empirisch onderbouwd algemeen evenwichts• model zou de discussie over het in Nederland te voeren sociaal- economische beleid op een hoger plan kunnen worden gebracht. 7. De bewering van Rutten dat de door hem geformuleerde 'vaste vuist• regels' meer houvast bieden voor de algemeen-economische politiek dan ' modelresultaten', is vooral interessant als illustratie van het gemak waar• mee men binnen de economische wetenschap politieke knollen voor eco• nomische citroenen kan verkopen. F.W. Rutten (1987): 'Economische wetenschap en economisch beleid1. Economenblad, jaargang 9, nr. 6. 8. Argumenten die pleiten voor een vrij internationaal verkeer van goederen en kapitaal zijn evenzeer van toepassing op een vrij internationaal verkeer van arbeid. Het is een bedenkelijke vorm van opportunisme dat met betrekking tot arbeid de vrijhandelsargumenten zo goed als volledig genegeerd worden. 9. Het EG-landbouwbeleid stimuleert de consumptie van plantaardige vetten ten koste van die van dierlijke. Het positieve effect hiervan op de volksgezondheid speelt in de huidige discussie over dit beleid ten onrechte geen rol van betekenis. H.3.3. Stolwijk Options for economie growth in Bangladesh Wageningen, 9 september 1987 HJJ. STOLWIJK OPTIONS FOR ECONOMIC GROWTH IN BANGLADESH AN APPLICATION OF THE VON NEUMANN MODEL PROEFSCHRIFT ter verkrijging van de graad van doctor in de kndbouwwetenschappen, op gezag van de rector magnificus, dr. CC. Oosterlee, in het openbaar te verdedigen op woensdag 9 september 1987 des namiddags te vier uur in de aula van de I^dbouwuniversiteit te Wageningen BIBLIOTHEEK EAM)BOUWlJ]NTVERSITEIT WAGENINGEN LANDBOUWCATALOG US 0000 0234 3727 Promotor: drjr. J. de Hoogh, hoogleraar in de algemene agrarische economie, in het bijzonder de grond• slagen, de doeleinden en instrumenten van het landbouwbeleid. Co-promotor: dr. MA Keyzer, adjunct-directeur Stichting Onderzoek Wereldvoedselvoorziening. HJJ. STOLWIJK OPTIONS FOR ECONOMIC GROWTH IN BANGLADESH AN APPLICATION OF THE VON NEUMANN MODEL Free University Press Amsterdam 1987 CIP-GEGEVENS KONINKLIJKE BIBLIOTHEEK, DEN HAAG Stolwijk, H.J.J. Options for economic growth in Bangladesh: an application of the Von Neumann model/HJJ. Stolwijk. - Amsterdam: Free University Press Proefschrift Wageningea - Met index, litopg. - Met samenvatting in hetNederlands. ISBN 90-6256-564-6 SISO azjn-bang 352.53 UDC 338.1 (549.3X043.3) NUGI681 Trefw.: economische groei; Bangladesh / Von Neumann model Free University Press is an imprint of: VU Boekhandel/Uitgeverij b.v. DeBoelelaan 1105 1081HV Amsterdam The Netherlands © HJ.J. Stolwijk, Leidschendam, 1987. Alle rechten voorbehouden. Niets uit deze uitgave mag worden verveel - voudigd, opgeslagen in een geautomatiseerd gegevensbestand, of open - baar gemaakt, in enige vorm of op enige wijze, hetzij electronisch, mechanisch, door fotokopieën, opnamen, of enig andere manier, zonder voorafgaande schriftelijke toestemming van de uitgever. Voor zover het maken van kopieën uit deze uitgave is toegestaan op grond van artikel 16B Auteurswet 1912jB het Besluit van 20 juni 1974, Stb. 351, zoals gewijzigd bij het Besluit van 23 augustus 1985, Stb. 471 en artikel 17 Auteurswet 1912, dient men de daarvoor wettelijk verschuldigde vergoedingen te voldoen aan de Stichting Reprorecht (Postbus 882, 1180 AW Amstelveen). Voor het overnemen van ge- deelte(n) uit deze uitgave in bloemlezingen, readers en andere compi - latiewerken (artikel 16 Auteurswet 1912) dient men zich tot de auteur te wenden. All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronically, mechanically, by photocopying, by recording, or otherwise, without the prior written permission of the author. Aan mijn ouders vii CONTENTS Preface xi Chapter 1: Introduction 1 1.1 Aims 1 1.2 The choice for the Von Neumann model 2 1.3 Plan of the study 6 Chapter 2: The closed model 9 2.1 Plan of the chapter 9 2.2 Basic elements of the model ' 10 2.2.1 Goods and processes 10 2.2.2 Growth 13 2.2.3 Assumptions on technology matrices A and B 15 2.2.4 Prices, profits and the interest rate 19 2.3 The closed model: an axiomatic description 21 2.3.1 Axioms of the closed model 21 2.3.2 An example 24 2.3.3 The model as a two-person zero-sum game 28 2.4 The existence of economic equilibria 31 2.4.1 Introduction 31 2.4.2 The value of the game M 33 2.4.3 Solutions for which xBy>0 37 2.4.4 Multiple solutions 41 Chapter 3: Extensions of the model 47 3.1 Introduction 47 3.2 The opeh model 48 3.2.1 The Morgenstern-Thompson open economy 48 3.2.2 The open model in a closed form: an alternative formulation 52 3.3 Balanced growth of consumption 62 3.4 Initial endowments 65 3.4.1 Motivation 65 3.4.2 Capacity constraints 67 3.5 Raw materials and land 74 3.5.1 Raw materials 74 3.5.2 The problem with land 76 viii 3.5.3 Competition among technologies 81 3.5.4 Aggregation of land types 84 3.6 A theorem on aggregation 89 3.7 Non-balanced growth in consumption and regime-switches 91 3.7.1 Non-balanced growth in consumption 91 3.7.2 A deviating overall growth rate of consumption 93 3.7.3 The full model with consumption 95 3.7.4 Regime-switches 97 Chapter 4: Computing the growth factors of the model 101 4.1 Introduction 101 4.2 Current algorithms 103 4.2.1 A simple bisection procedure 103 4.2.2 Well's algorithm 104 4.2.3 The algorithm of Thompson 107 4.3 An alternative algorithm for solving the Von Neumann model 109 4.3.1 Motive 109 4.3.2 An overview of the algorithm 110 4.3.3 A rule for determining relevant goods and k+1 processes in Ma 111 4.3.4 Consequences of relaxing rows and penalizing activities 116 4.3.5 Proofs of different steps of the algorithm 120 4.3.6 The algorithm 129 4.3.7 An example 131 Chapter 5 : Bangladesh: some background Information 137 5.1 Plan of the chapter 137 5.2 Geography and demography 137 5.3 A brief historical sketch 141 5.4 Characterization of the economy 143 5.4.1 Gross Domestic Product: level and composition 143 5.4.2 The agricultural sector 147 5.4.3 Industry and services 150 Chapter 6: Empirical elaboration 153 6.1 Introduction 153 6.2 Model structure 154 6.2.1 From BAM-lp to M 154 ct 6.2.2 Activities and goods 161 6.3 Data and data organization 165 6.3.1 Set-up 165 6.3.2 A brief account of the data 181 6.4 Sketch of the model software 186 lx Chapter 7: Model results 191 7.1 Introduction 191 7.2 A straight application 192 7.2.1 Scenarios 192 7.2.2 The closed model without consumption 193 7.2.3 The closed consumption model 198 7.2.4 The open model 204 7.3 Results of the base-run 208 7.3.1 Non-balanced growth 208 7.3.2 Assumptions 209 7.3.3 Base-run outcomes: growth rates 213 7.3.4 Model results
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