Introduction to Computable General Equilibrium Models

Computable general equilibrium (CGE) models are widely used by governmental organizations and academic institutions to analyze the economy-wide effects of events such as climate change, tax policies and immigration. This book provides a practical, how-to guide to CGE models suitable for use at the undergraduate college level. Its introductory level distinguishes it from other available books and articles on CGE models. The book provides intuitive and graphical explanations of the economic theory that underlies a CGE model and includes many examples and hands-on modeling exercises. It may be used in courses on economics principles, microeconomics, macroeconomics, public finance, environmental economics and international trade and finance, because it shows students the role of theory in a realistic model of an economy. The book is also suitable for courses on general equilibrium models and research methods and for professionals interested in learning how to use CGE models.

Factor Productivity Change.

Cover -- Half-title -- Title -- Copyright -- Dedication -- Contents -- Text Boxes -- About This Book -- Objectives -- Organization -- Resources for New CGE Modelers -- For the Instructor -- Acknowledgments -- 1 Introduction to Computable General Equilibrium Models -- Economic Models, Economists' Toys -- What Is a Computable General Equilibrium Model? -- Computable -- General -- Equilibrium -- A Standard CGE Model -- CGE Model Structure -- CGE Model Database -- CGE Model Applications -- Summary -- Key Terms -- Practice and Review -- 2 Elements of a Computable General Equilibrium Model -- Sets.

Endogenous Variables -- Exogenous Variables -- Model Closure -- Exogenous Parameters -- Tax and Tariff Rates -- Elasticity Parameters -- Supply Elasticity Parameters -- Demand Elasticity Parameters -- Shift and Share Parameters -- Model Calibration -- Equations -- Macroclosure -- Normalizing Prices -- Price Linkages -- Numeraire -- Structure of a CGE Model -- Summary -- Key Terms -- Practice and Review -- 3 The CGE Model Database: A Social Accounting Matrix -- Introduction to the Social Accounting Matrix -- Accounts in a SAM -- Production Activities -- Commodities -- Factors of Production.

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