Handbook of Computable General Equilibrium Modeling, Volume 1A-1B
1st Edition
Description
Top scholars synthesize and analyze scholarship on this widely used tool of policy analysis in 27 articles, setting forth its accomplishments, difficulties, and means of implementation. Though CGE modeling does not play a prominent role in top U.S. graduate schools, it is employed universally in the development of economic policy. This collection is particularly important because it presents a history of modeling applications and examines competing points of view.
Key Features
- Presents coherent summaries of CGE theories that inform major model types
- Covers the construction of CGE databases, model solving, and computer-assisted interpretation of results
- Shows how CGE modeling has made a contribution to economic policy
Readership
Graduate students and professors worldwide working in all subdisciplines of economics and finance
Table of Contents
Introduction to the Series
Contributors
Preface
Chapter 1. Introduction
1.1 Overview
1.2 Single-country models
1.3 Global models
1.4 Technical aspects of CGE modeling: data, parameter estimation, computation and validation
1.5 Current cutting-edge methodological areas
References
Chapter 2. The MONASH Style of Computable General Equilibrium Modeling: A Framework for Practical Policy Analysis
2.1 Introduction
2.2 Telling a CGE Story
2.3 From Johansen to ORANI
2.4 Extending Johansen’s Computational Framework: The Mathematical Structure of a MONASH Model
2.5 Responding to the Needs of CGE Consumers: The Four Closure Approach
2.6 Concluding Remarks
Acknowledgments
References
Chapter 3. Computable General Equilibrium Assessments of Fiscal Sustainability in Norway
3.1 Introduction
3.2 Model Structure
3.3 Evaluating Fiscal Sustainability
3.4 Sensitivity of the Fiscal Prospects to Variations in Economic Growth and Terms of Trade
3.5 Norwegian Public Pension Reform
3.6 Demographic Uncertainty
3.7 Increasing Prefunding Through a Stricter Fiscal Policy Rule
3.8 Final Remarks
References
Chapter 4. MAMS – A Computable General Equilibrium Model for Developing Country Strategy Analysis
4.1 Introduction
4.2 Context and Main Contributions of MAMS
4.3 Model Design
4.4 Mathematical Structure of MAMS
4.5 MAMS Database
4.6 User-friendly Interface
4.7 Applications: Policy Issues and Insights
4.8 Conclusion
References
Chapter 5. Contribution of Computable General Equilibrium Modeling to Policy Formulation in Developing Countries
5.1 Introduction
5.2 Types of CGE Models for Development Policy
5.3 CGE Models and Policy Formulation
5.4 Conclusions
Acknowledgments
References
Chapter 6. Putting Services and Foreign Direct Investment with Endogenous Productivity Effects in Computable General Equilibrium Models
6.1 Introduction
6.2 Modeling Services and FDI in a Stylized Small CGE Model
6.3 Impact of Liberalizing Barriers to FDI in Services: the Case of Russian Accession to the World Trade Organization
6.4 Poverty Effects Of Russia’s Wto Accession: modeling “Real” Households With Fdi In Services And Endogenous Productivity Effects
6.5 Policy Impacts and Other Model Applications and Extensions
Acknowledgments
References
Chapter 7. Regional Computable General Equilibrium Modeling
7.1 Introduction
7.2 What Regional Models Can Tell Us
7.3 Short Review of the Development of Regional CGE Models
7.4 A Modern Multiregional CGE Model
7.5 Constructing (Multi)regional Databases
7.6 Simulations and Interpretation of Multiregional Model Mechanisms
7.7 Concluding Remarks
Acknowledgments
References
Chapter 8. Energy, the Environment and US Economic Growth
8.1 Introduction
8.2 IGEM
8.3 Intertemporal Equilibrium and Economic Growth
8.4 Welfare measurement
8.5 Evaluation of climate policy
8.6 Conclusions
References
Chapter 9. Computable General Equilibrium Modeling of Environmental Issues in Australia
9.1 Introduction
9.2 MMRF
9.3 Additional Enhancement for ETS Modeling
9.4 Base Case
9.5 ETS Simulation Design
9.6 Economic Effects of the ETS
9.7 Conclusion
References
Chapter 10. Taxation, Efficiency and Economic Growth
10.1 Introduction
10.2 Modeling Economic Growth
10.3 Modeling Consumer and Producer Behavior
10.4 Economic Impact of Tax Reform
10.5 Income Tax Reform
10.6 Consumption Tax Reform
10.7 Conclusions
Acknowledgments
References
Chapter 11. Dynamic Overlapping Generations Computable General Equilibrium Models and the Analysis of Tax Policy: The Diamond–Zodrow Model
11.1 Introduction
11.2 Brief History of OLG-CGE Modeling of Tax Reform
11.3 Overview of the DZ model
11.4 Applications of the DZ Model
11.5 Conclusion
References
Chapter 12. Global Applied General Equilibrium Analysis Using the Global Trade Analysis Project Framework
12.1 Introduction: what is GTAP and why has it succeeded?
12.2 Design of the standard gtap modeling framework
12.3 Model validation and systematic sensitivity analysis
12.4 Software and implementation issues
12.5 GTAP-based analysis of global economic integration
12.6 CGE modeling of global environmental issues
12.7 Future directions for GTAP
Acknowledgments
References
Chapter 13. Estimating Effects of Price-Distorting Policies Using Alternative Distortions Databases
13.1 Introduction
13.2 Concern with Missing Price-Distorting Measures
13.3 Concern with the Counterfactual
13.4 Concern with Tariff Aggregation
13.5 Conclusions
Acknowledgments
References
Chapter 14. Modeling the Global Economy – Forward-Looking Scenarios for Agriculture
14.1 Introduction
14.2 Global Modeling at the World Bank
14.3 Model Specification
14.4 Macroeconomics of the baseline scenario
14.5 Agriculture towards 2050
14.6 Climate Change and its Impacts
14.7 Concluding Thoughts
Acknowledgments
References
Chapter 15. A Global Approach to Energy and the Environment
15.1 Introduction
15.2 Structure of the Model
15.3 Summary of Key Applications and Insights
15.4 Sample Applications
15.5 Conclusion
Acknowledgments
References
Chapter 16. Integrated Economic and Climate Modeling
16.1 Introduction
16.2 Dice and Rice Models as Examples of IAMs
16.3 Illustrative Model Results: The Copenhagen Accord
16.4 Some Major Issues for Research in IAM
16.5 Final Thoughts
Acknowledgments
References
Chapter 17. An Econometric Approach to General Equilibrium Modeling
17.1 Introduction
17.2 Econometric Modeling of Producer Behavior
17.3 Application of the Kalman Filter
17.4 Instrumental Variables and Specification Tests
17.5 Empirical Results on Producer Behavior
17.6 Econometric Modeling of Consumer Behavior
17.7 Data Issues in Modeling Consumer Behavior
17.8 Aggregate Demands for Goods and Leisure
17.9 Intertemporal Allocation of Full Consumption
17.10 Computing Confidence Intervals
17.11 Conclusions
Acknowledgments
References
Chapter 18. Trade Elasticity Parameters for a Computable General Equilibrium Model
18.1 Introduction
18.2 Why do trade elasticities matter?
18.3 Import demand elasticities
18.4 Export supply
18.5 Gravity, trade costs and structural estimation
References
Chapter 19. Validation in Computable General Equilibrium Modeling
19.1 Introduction
19.2 Checking the Code: Homogeneity Tests and Other Checking Simulations
19.3 Validation Through the Gdp Identity
19.4 Validation Through Back-of-The-Envelope (Bote) Analysis and Other Plausibility Checks
19.5 Consistency with History
19.6 Forecasting Performance
19.7 Conclusion
Acknowledgments
References
Chapter 20. Solution Software for Computable General Equilibrium Modeling
20.1 Introduction
20.2 Early Days
20.3 General-Purpose Software
20.4 Levels and Change Solution Methods
20.5 General Features of CGE Models
20.6 Three Representations of a Simple Model
20.7 Curse of Dimensionality
20.8 Checking and Debugging Models
20.9 Comparing Features of Gams and Gempack
20.10 Concluding Remarks
References
Chapter 21. Income Distribution in Computable General Equilibrium Modeling
21.1 Introduction
21.2 Static Distribution Oriented Macro–Micro Models Based on Walrasian CGE
21.3 Static Macro–Micro Distributional Models with Real or Apparent Labor Market Imperfections
21.4 Dynamic Macro–Micro Modeling
21.5 Gidd Model as an Example of a Global Dynamic Macro–Micro Model
21.6 Concluding Remarks
References
Chapter 22. The New Keynesian Approach to Dynamic General Equilibrium Modeling: Models, Methods and Macroeconomic Policy Evaluation
22.1 Introduction
22.2 The New Keynesian Approach to Monetary Economics: A Brief History Of Thought
22.3 Building New Keynesian Models
22.4 Methods for Model Solution and Estimation
22.5 A New Approach to Model Comparison and Policy Evaluation
22.6 Policy Evaluation and Robustness under Model Uncertainty
22.7 Open Questions and Future Research
Acknowledgments
References
Chapter 23. Computing General Equilibrium Theories of Monopolistic Competition and Heterogeneous Firms
23.1 Introduction
23.2 Trade Theories
23.3 General Equilibrium Formulation
23.4 Computation as a Companion to Theory
23.5 Calibration
23.6 Decomposition Strategy for Computation of Large Models
23.7 Applications
23.8 Conclusion
References
Chapter 24. Market Structure in Multisector General Equilibrium Models of Open Economies
24.1 Introduction
24.2 Oligopoly
24.3 Monopolistic Competition
24.4 Model Selection and Validation
24.5 Summary
Note
References
Chapter 25. Computable General Equilibrium Modeling of Market Access in Services
25.1 Introduction
25.2 Definitional and Data Issues
25.3 Conceptual Issues
25.4 Implementation Issues
25.5 Models of Services Liberalization
25.6 Modes of Supply and Sector Specificity
25.7 An Example
25.8 Setting Future Research Priorities
25.9 Conclusions
Acknowledgments
References
Chapter 26. The Labor Market in Computable General Equilibrium Models
26.1 Introduction
26.2 A Classification of Labor-Market Related Questions
26.3 Labor Supply
26.4 Labor Demand
26.5 Labor Market Coordination
26.6 Welfare Analysis
26.7 Conclusions
Acknowledgments
References
Chapter 27. Generational Policy and Aging in Closed and Open Dynamic General Equilibrium Models
27.1 Introduction
27.2 Preliminaries: Modeling of Aging, Retirement and Idiosyncratic Income Risk
27.3 Closed-Economy Model for Germany
27.4 Multiregional world model
27.5 Summary of results
Acknowledgements
References
Index-Volume 1A
Index-Volume 1B
Details
- No. of pages:
- 1896
- Language:
- English
- Copyright:
- © North Holland 2013
- Published:
- 14th November 2012
- Imprint:
- North Holland
- Hardcover ISBN:
- 9780444595683
- eBook ISBN:
- 9780444626318
About the Editor
Peter Dixon
Sir John Monash Distinguished Professor, Centre of Policy Studies, Monash University, Australia
Affiliations and Expertise
Professor and Principal Researcher, Centre of Policy Studies, Monash University, Victoria, Australia
Dale Jorgenson
Professor of Economics, Harvard University, Cambridge, Mass USA
Affiliations and Expertise
Professor of Economics, Harvard University, Cambridge Mass USA
Reviews
"This two-volume set is the first in the publisher's new series, ‘Handbooks in Economics,’ devoted to publication of authoritative references focused on particular branches of economics, in this case, CGE modeling, which is a tool used ubiquitously for policy analysis and development. The series' handbooks are intended to be self-contained, offering background and a survey of prevailing and competing views as well as current developments - in a manner suitable both for professional reference and as supplementary reading for advanced graduate courses." --Reference and Research Book News, December 2013
"The chapters in these volumes address many of the most challenging economic policy issues facing both developed and developing countries and regions. The books are required reading for anyone wishing to understand the power and range of computable general equilibrium modelling as an input to strategy analysis and policy making." --Larry Dwyer, University of New South Wales
"The rich CGE applications presented in these volumes show that CGE modeling is a vital tool for policy analysis. These chapters will be valuable resources for students and scholars who are interested in new insights and developments." --Jian Xie, The World Bank
