Optimal Fisheries Investment: Comparative Dynamics for a Deterministic Seasonal Fishery

1983 ◽  
Vol 40 (12) ◽  
pp. 2069-2079 ◽  
Author(s):  
Anthony T. Charles
Keyword(s):  
Population Dynamics ◽  
Capital Stock ◽  
Capital Investment ◽  
Major Complication ◽  
Physical Capital ◽  
Optimal Investment ◽  
Programming Approach ◽  
Depreciation Rate ◽  
Capital Costs ◽  
Comparative Dynamics

A dynamic fisheries model is developed to simultaneously optimize investment in the resource stock (the fish) and investment in the capital stock (the fleet). Each of these investment problems faces a major complication; investment in the resource is constrained by the natural population dynamics, while investment in the physical capital stock tends to be irreversible because capital used in natural resource industries is often nonmalleable. The model assumes a seasonal fishery in which annual escapement and capital investment levels can be controlled. A dynamic programming approach is used to analyze the model heuristically and numerically. The comparative dynamics of optimal investment strategies are studied, with regard to (i) delays in investment, (ii) population dynamics parameters, (iii) fish price, (iv) capital cost, (v) depreciation rate, and (vi) discount rate. In particular, the depreciation rate and the ratio of unit capital costs to unit operating costs play interesting and complex roles in determining optimal investment levels.

scholarly journals OPTIMAL INVESTMENT ON FINITE HORIZON WITH RANDOM DISCRETE ORDER FLOW IN ILLIQUID MARKETS

2011 ◽  
Vol 14 (01) ◽  
pp. 17-40 ◽  
Author(s):  
PAUL GASSIAT ◽  
HUYÊN PHAM ◽  
MIHAI SÎRBU
Keyword(s):  
Dynamic Programming ◽  
Optimal Investment ◽  
Market Model ◽  
Programming Approach ◽  
Order Flow ◽  
Short Sale Constraints ◽  
Dynamic Programming Approach ◽  
Short Sale ◽  
Illiquid Markets ◽  
Investor Trading

We study the problem of optimal portfolio selection in an illiquid market with discrete order flow. In this market, bids and offers are not available at any time but trading occurs more frequently near a terminal horizon. The investor can observe and trade the risky asset only at exogenous random times corresponding to the order flow given by an inhomogenous Poisson process. By using a direct dynamic programming approach, we first derive and solve the fixed point dynamic programming equation satisfied by the value function, and then perform a verification argument which provides the existence and characterization of optimal trading strategies. We prove the convergence of the optimal performance, when the deterministic intensity of the order flow approaches infinity at any time, to the optimal expected utility for an investor trading continuously in a perfectly liquid market model with no-short sale constraints.

scholarly journals The endogeneity of the natural rate of growth: An application to Turkey

2010 ◽  
Vol 57 (4) ◽  
pp. 447-469
Author(s):  
Senay Acikgoz ◽  
Merter Mert
Keyword(s):  
Capital Stock ◽  
Labour Force ◽  
Physical Capital ◽  
Test Results ◽  
Natural Rate ◽  
Causality Test ◽  
Rate Of Growth ◽  
Production Factors ◽  
Long Run ◽  
Turkish Economy

The purpose of this paper is to examine the sensitivity of the Turkish economy?s natural rate of growth to the actual rate of growth, covering the period 1980-2008. To determine the reason why the natural rate of growth is endogenous, the long-run and the causality relationships between real gross domestic product and each of the production factors (labour force and physical capital stock) are investigated with the bounds test. The natural rate of growth for the Turkish economy is found to be at 4.97 percent and it increases approximately 35.6 percent in the boom periods; indicating endogeneity. However, according to the causality test results, the endogeneity of the natural rate of growth may be attributed to the total factor productivity rather than the labour force and physical capital stock. This result is important and the debate on this subject may lead to further studies.

scholarly journals Dynamics of Physical Capital in Artisanal Fisheries and Policy Implications

2020 ◽  
Vol 25 (2) ◽  
pp. 46
Author(s):  
Shekar Bose ◽  
Hussein Samh Al-Masroori ◽  
Salim Darwish Salim Al-Hasani
Keyword(s):  
Growth Rate ◽  
Capital Stock ◽  
Physical Capital ◽  
Policy Implications ◽  
Future Research ◽  
Artisanal Fisheries ◽  
Positive Trend ◽  
Hedonic Regression ◽  
Average Growth ◽  
Annual Fluctuation

The dynamics of physical capital stock and net investment in artisanal fisheries of Al-Seeb - a coastal fishing town of Muscat Governorate are examined covering the period 2004-2013 . Data were gathered from two sources namely the Ministry of Agriculture and Fisheries and field survey. A hedonic regression model is used to examine the influence of boat characteristics on the boat acquisition prices and then to derive the growth rate of physical capital stock. Boat characteristics comprising of ‘age’, ‘horsepower (hp)’ and ‘length (vl)’ are found to be statistically significant at the 5% level and carry sign consistent with the economic theory of depreciation and cost respectively. While inter-annual fluctuation of net investment is observed, a positive trend in cumulative investment with an average growth rate of 7.63% is experienced in the fishery during 2004-2013. A crude assessment of the operating costs and the gross revenue of surveyed boat-owners in 2015 showed that on average monthly economic profit of 570.97±169.36SD OMR was received by individual boat-owner which complements the positive trend in cumulative investment.These findings have important management and policy implications in relation to the effective management of harvesting capacity as well as attract investment in the fishery. Finally, some limitations of the study are discussed along with the indication of potential future research.

Optimal Fisheries Investment under Uncertainty

1983 ◽  
Vol 40 (12) ◽  
pp. 2080-2091 ◽  
Author(s):  
Anthony T. Charles
Keyword(s):  
Optimal Investment ◽  
Fish Stock ◽  
Investment Strategies ◽  
Economic Optimization ◽  
Stock Management ◽  
Investment Under Uncertainty ◽  
Capital Costs ◽  
Wide Range ◽  
Full Analysis ◽  
Fishing Fleets

A full analysis of optimal fisheries investment strategies must take into account high levels of uncertainty in future fishery returns, as well as irreversibility of investment in specialized, nonmalleable fishing fleets. A stochastic optimization model is analyzed using dynamic programming to determine optimal policy functions for both fleet investment and fish stock management within an uncertain environment. The resulting policies are qualitatively similar to those found in the corresponding deterministic case, but quantitative differences can be substantial. Simulation results show that optimal fleet capacity should be expected to fluctuate over a fairly wide range, induced by stochastic variations in the biomass. However, the performance of a linear-cost risk-neutral fishery is fairly insensitive to variations in investment and escapement policies around their optimum levels, so that economic optimization is "forgiving" within this context. A framework of balancing upside and downside investment risks is used here to explain the roles of several fishery parameters in relation to optimal investment under uncertainty. In particular, the intrinsic growth rate of the resource and the ratio of unit capital costs to unit operating costs are found to be key parameters in determining whether investment should be higher or lower under uncertainty.

scholarly journals Macroeconomic and distributional effects of demographic change in an open economy—the case of Belgium

2020 ◽  
Vol 86 (1) ◽  
pp. 87-124
Author(s):  
Willem Devriendt ◽  
Freddy Heylen
Keyword(s):  
Open Economy ◽  
Demographic Change ◽  
Capital Investment ◽  
Physical Capital ◽  
Investment Model ◽  
Overlapping Generations Model ◽  
Endogenous Variables ◽  
Working Age ◽  
Negative Effect ◽  
Per Capita

AbstractWe construct and parameterize an overlapping generations model for an open economy with individuals who differ in innate ability. Key endogenous variables are hours worked, investment in human and physical capital, and per capita growth. The model replicates important data in Belgium since 1960 remarkably well. Simulating it, we observe that behavioral adjustments by households and firms contribute to reverse the negative arithmetical effect of future demographic change on per capita growth. Individuals work and study more. However, with unchanged policies, there remains a net negative effect on annual per capita growth of almost 0.3%-points on average in the next 25 years. This is mainly due to adverse consequences of reduced fertility and a declining working-age population on (the return to) physical capital investment. Model projections also point to rising income inequality induced by demographic change. Differences in the capacity of individuals to respond to increasing life expectancy by investing in education, and by saving, are key.

System Integration and Techno-Economy Analysis of the IGCC Plant With CO2 Capture: Results of the EU H2-IGCC Project

2015 ◽  
Author(s):  
Mohammad Mansouri Majoumerd ◽  
Mohsen Assadi ◽  
Peter Breuhaus ◽  
Øystein Arild
Keyword(s):  
Co2 Capture ◽  
Capital Investment ◽  
Power Plants ◽  
System Analysis ◽  
Combined Cycle ◽  
Economic Evaluations ◽  
Extensive Literature ◽  
Capital Costs ◽  
Cost Of Electricity ◽  
Plant Components

The overall goal of the European co-financed H2-IGCC project was to provide and demonstrate technical solutions for highly efficient and reliable gas turbine technology in the next generation of integrated gasification combined cycle (IGCC) power plants with CO2 capture suitable for combusting undiluted H2-rich syngas. This paper aims at providing an overview of the main activities performed in the system analysis working group of the H2-IGCC project. These activities included the modeling and integration of different plant components to establish a baseline IGCC configuration, adjustments and modifications of the baseline configuration to reach the selected IGCC configuration, performance analysis of the selected plant, performing techno-economic assessments and finally benchmarking with competing fossil-based power technologies. In this regard, an extensive literature survey was performed, validated models (components and sub-systems) were used, and inputs from industrial partners were incorporated into the models. Accordingly, different plant components have been integrated considering the practical operation of the plant. Moreover, realistic assumptions have been made to reach realistic techno-economic evaluations. The presented results show that the efficiency of the IGCC plant with CO2 capture is 35.7% (lower heating value basis). The results also confirm that the efficiency is reduced by 11.3 percentage points due to the deployment of CO2 capture in the IGCC plant. The specific capital costs for the IGCC plant with capture are estimated to be 2,901 €/(kW net) and the cost of electricity for such a plant is 90 €/MWh. It is also shown that the natural gas combined cycle without CO2 capture requires the lowest capital investment, while the lowest cost of electricity is related to IGCC plant without CO2 capture.

Introduction to aspects of economics and logistics

1978 ◽  
Vol 290 (1366) ◽  
pp. 3-19 ◽  
Keyword(s):  
Capital Investment ◽  
Sedimentary Basins ◽  
Economic Implications ◽  
High Productivity ◽  
Capital Costs ◽  
Oil Companies ◽  
The Past ◽  
Codes Of Practice ◽  
Financial Arrangements ◽  
Exploration And Development

During the past five years the oil industry has moved its exploration and development programmes into progressively deeper waters, so that production operations in 150 m (500 feet) of water are becoming conventional, and exploration in water depths of over 300 m (1000 feet) commonplace. The first part of this introductory paper is devoted to areas of opportunity in the deeper waters of the sedimentary basins of the world, with particular emphasis on the technical merits of these areas, and the size and high productivity necessary to justify their development. A description follows of the trend in licensing terms, the tax and financial arrangements that might apply, and the growing involvement of national oil companies and national energy policies with their consequent effect on the control of developments, right to export oil, and the division of profits. The increasing importance of logistic and environmental factors on the technological requirements both in exploration and development is outlined, and some examples drawn of their political and sociological impacts. The development of supporting infrastructure in remote environments, of national preference for materials and services, codes of practice and further constraints in the overall capital investment programmes, are also outlined. The final section deals with the economic implications of these international activities where during the course of the next 25 years it is expected that offshore oil production rates will double. The nature of the risk investments where exploration wells now cost between £3 and £5 M each, and capital costs for individual projects are over £1000 M, are examined, reflecting differences between the private sector objectives and national oil company objectives. Examples can be drawn from events in O.P.E.C. areas during the past five years.

scholarly journals Optimal taxation with unobservable investment in human capital

2019 ◽  
Vol 72 (2) ◽  
pp. 501-516 ◽  
Author(s):  
Catarina Reis
Keyword(s):  
Human Capital ◽  
Capital Accumulation ◽  
Optimal Taxation ◽  
Capital Investment ◽  
Physical Capital ◽  
Income Taxes ◽  
Long Run ◽  
Positive Rate ◽  
The Government ◽  
Physical Capital Accumulation

Abstract In a Ramsey model of optimal taxation, if human capital investment can be observed separately from consumption, it is optimal not to distort human or physical capital accumulation in the long run, and only labour income taxes should be used. However, in reality the government can’t always distinguish between investment in human capital and pure consumption, so a tax on labour or consumption will necessarily tax human capital. We find that when investment in human capital is unobservable, the optimal policy is to tax human capital at a positive rate, even in the long run. Whether physical capital should be taxed or not depends on its degree of complementarity with human capital versus labour.

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