Computable general equilibrium models : theory and applications (original) (raw)

CEEAplA WP No . 06 / 2006 Computable General Equilibrium Models : A Literature Review

2006

Applied general equilibrium models have become popular tools used on ongoing economic policy debates. In this paper we discuss at length the most proeminent features of applied general equilibrium models in a comprehensive and non-technical way, thus accessible to the reader interested in economic policy but with no prior formal exposure to economic modeling. We rationalize the increasing political demand for such models as policy analysis tools. We argue that applied general equilibrium models are best equipped to model regional economies. Keywords: Regional Economic Modeling; CGE Models. JEL Codes: R11; C68. This paper was written within the development of a project to develop An Instrument of Economic Policy Analysis for the Azores, nanced by several institutions, namely, the US Department of Agriculture, the Luso-American Development Foundation and the Regional Government of the Azores. The project was managed by CEEAplA, an FCT supported center of the Universities of the Azo...

Insights or forecasts? An evaluation of a computable general equilibrium model of Spain

Journal of forecasting, 1993

Computable general equilibrium (CGE) models are widely used as an advanced tool to evaluate alternative economic strategies and policy measures. These models are well rooted in solid economic theory, yet a crucial question is hardly asked: how well do these models perform? We address this question by comparing the economic performance of the Spanish economy in 1988 with the simulation results drawn from a CGE model calibrated with a 1987 Social Accounting Matrix. The values of endogenous variables used in the comparison are the equilibrium values provided by the model after updating the values of exogenous variables such as labour and capital endowments, real exports and effective nominal exchange rates with the European Community and the rest of the world, real government expenditures, and various tax rates, government subsidies, and transfers. The comparison shows that the model captures adequately the major developments that occurred in the Spanish economy in 1988. This result increases our confidence in the quantitative estimates derived from the model in the usual simulation exercises.

The New Generation of Computable General Equilibrium Models - Modelling the Economy

2018

The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

DGEP - A Dynamic General Equilibrium Model of the Portuguese Economy: Model Documentation

2012

In this paper we describe the model structure, data, and implementation procedures for the Dynamic General Equilibrium model of the Portuguese Economy, DGEP for short. Previous versions of this model have been used to evaluate the impact of tax policy and social security reform in Portugal. More recent applications, which are the focus of this document, deal with energy and environmental policy issues.

General Equilibrium Models: An Overview

This article reviews the literature on general equilibrium models, relevant to the Chilean economy, and revised versions of the papers presented at the Conference of General Equilibrium Models for the Chilean Economy organized by the Central Bank of Chile, that will be published in a book by the same name (edited by Rómulo Chumacero and Klaus Schmidt-Hebbel, 2005). This introductory chapter provides a brief overview of the development and application of three families of GEMs: macroeconomic GEMs, computable general equilibrium models, and overlapping generations models. We also summarize the scope and main results of the twelve GEMs that comprise the volume.

The Concept of Computable General Equilibrium Models

International Journal of Research in Commerce and Management Studies

This paper contributes to the existing literature on the general concept on use of the Computable general equilibrium (CGE) models of importance in developing processes. Computable general equilibrium (CGE) models are used widely in policy analysis, especially in developed-country academic settings and also for the purpose of sharing these lessons with potential users in developing countries. The range of issues on which CGE models have had an influence is quite wide, and includes structural adjustment policies, international trade, public finance, agriculture, income distribution, and energy and environmental policy. This paper describes how to build multi sector computable general equilibrium models for policy analysis. The article presents the social accounting matrix (SAM) that provides the conceptual framework linking together different components of the model and furnishes much of the data as well.

Computable General Equilibrium Models: A Literature Review

2006

The Structure of Applied General Equilibrium Models

2002

First MIT Press paperback edition, 2002 ,r 1997 Massachusetts Institute of Technology All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without ...

Applied General Equilibrium Analysis

Economica, 1986

Walrasian general-equilibrium theory provided the central framework of 20 th century economics, "the ultimate model of the market" (John Shoven and John Whalley 2015, 2). Joseph Schumpeter considered it the "Magna Carta" of economics, providing both a constitutional document and a map for the field (1954, 242 and 827). In the 1950s and 1960s, Harry Johnson (1951-52, 1956), Arnold Harberger (1962), and others used general-equilibrium methods to study a variety of applied policy issues, such as the welfare effects of tariffs and the incidence of the corporate income tax. The models used by these researchers were small enough that they could be solved analytically. By the 1970s, economists were developing general-equilibrium models of sufficient size and complexity that it was necessary to use computers to find numerical solutions. In this paper, we will discuss both analytical and computational models, but our main focus is on the computational models. The computational models have come to be known as applied general-equilibrium (AGE) or computational GE or computable GE (CGE) models. We will refer to the computational models as AGE models, even though the analytical models also fall under the rubric of applied work. AGE models involve mathematical specifications of the behaviors of agents, who interact through supply and demand for different goods in a Walrasian general-equilibrium system. Government policies are typically modeled as constraints to be manipulated. The models produce computer simulations of the effects of policy changes on economic variables, such as prices, quantities, growth rates, employment, income, and economic efficiency. AGE models are most widely employed in international trade, public finance, economic development, and

Computable general equilibrium models : theory and applications (original) (raw)

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