MAgPIE - An Open Source land-use modeling framework

4.3.0

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Interest rate (12_interest_rate)

Description

Interest rates are used in MAgPIE as a risk-accounting factor associated with investment activities (Wang et al. 2016). Interest rates are required for inter-temporal calculations in the model such as shifting investment from one time step to another or distribution of one-time investments over several time steps (e.g. in the modules 13_tc, 39_landconversion and 41_area_equipped_for_irrigation).

Interfaces

Interfaces to other modules

Input

module inputs (A: select_apr20)
  Description Unit A
im_development_state
(t_all, i)
Development state according to the World Bank definition where 0=low income country 1=high income country in high income level \(1\) x
im_pop_iso
(t_all, iso)
Population \(10^6/yr\) x

Output

module outputs
  Description Unit
pm_interest
(t_all, i)
Interest rate in each region and timestep \(\%/yr\)

Realizations

(A) select_apr20

The select_apr20 realization allows to flexibly choose regional or global interest rates. In the default setting, the interest rate depends on the development state im_development_state, which is calculated based on GDP per capita. Thus, interest rates are regionally specific and dynamic over time. Alternative interest rates can be selected via the interest rate coefficients (s12_interest_lic, s12_interest_hic, s12_hist_interest_lic, s12_hist_interest_hic). The future interest rate policy fades in starting from 2025 until it is fully in effect by 2050. It is also possible to choose a global interest rate.

Limitations There are no known limitations.

Definitions

Objects

module-internal objects (A: select_apr20)
  Description Unit A
i12_interest_fader
(t_all)
Fader for interest rate policy \(1\) x
p12_country_dummy
(iso)
Dummy parameter indicating whether country is affected by interest rate scenario \(1\) x
p12_reg_shr
(t_all, i)
Weighted share of region with regards to interest rate scenario of countries \(1\) x
s12_hist_interest_hic Historic interest rate in low income countries \(1\) x
s12_hist_interest_hic_noselect Historic interest rate in low income countries for nonselected countries only active when regional switch activated \(1\) x
s12_hist_interest_lic Historic interest rate in high income countries \(1\) x
s12_hist_interest_lic_noselect Historic interest rate in high income countries for nonselected countries only active when regional switch activated \(1\) x
s12_interest_hic Interest rate in low income countries \(1\) x
s12_interest_hic_noselect Interest rate in low income countries for nonselected countries only active when regional switch activated \(1\) x
s12_interest_lic Interest rate in high income countries \(1\) x
s12_interest_lic_noselect Interest rate in high income countries for nonselected countries only active when regional switch activated \(1\) x

Sets

sets in use
  description
i all economic regions
i_to_iso(i, iso) mapping regions to iso countries
iso list of iso countries
select_countries12(iso) countries to be affected by chosen interest rate scenario
t_all(t_ext) 5-year time periods

Authors

Xiaoxi Wang

See Also

09_drivers, 12_interest_rate, 13_tc, 32_forestry, 38_factor_costs, 39_landconversion, 41_area_equipped_for_irrigation, 56_ghg_policy, 58_peatland

References

Wang, Xiaoxi, Anne Biewald, Jan Philipp Dietrich, Christoph Schmitz, Hermann Lotze-Campen, Florian Humpenöder, Benjamin Leon Bodirsky, and Alexander Popp. 2016. “Taking Account of Governance: Implications for Land-Use Dynamics, Food Prices, and Trade Patterns.” Ecological Economics 122 (February): 12–24. https://doi.org/10.1016/j.ecolecon.2015.11.018.