Calibration of CES functions for real-world multisectoral modeling

Ferran Sancho

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: We show how to calibrate CES production and utility functions when indirect taxation affecting inputs and consumption is present. These calibrated functions can then be used in computable general equilibrium models. Taxation modifies the standard calibration procedures since any taxed good has two associated prices and a choice of reference value units has to be made. We also provide an example of computer code to solve the calibration of CES utilities under two alternate normalizations. To our knowledge, this paper fills a methodological gap in the CGE literature.

JEL-codes: C63 C68 C81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp
Date: 2007-10-15
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Related works:
Journal Article: CALIBRATION OF CES FUNCTIONS FOR REAL-WORLD MULTISECTORAL MODELING (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:aub:autbar:715.07

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