Forward looking dynamics in spatial CGE modelling

Johannes Bröcker and Artem Korzhenevych ()

Economic Modelling, 2013, vol. 31, issue C, 389-400

Abstract: This paper sets up a spatial dynamic CGE framework by combining the optimal growth model of saving and investment under adjustment costs and the spatial CGE model with Dixit–Stiglitz structure in the modern sector. Because of increasing product diversity on the dynamic equilibrium path, the model belongs to the category of semi-endogenous growth models. We overcome the difficulty of existing multiregional models to correctly approximate the infinite horizon equilibrium by employing a theoretically consistent terminal condition. The distinction of goods, factors, firms, and households by location, and the incorporation of trade costs in the model allow to study a variety of issues in regional and transport economics. We describe the model calibration and a tailor-made solution algorithm. The functionality is demonstrated using two illustrative examples.

Keywords: Spatial dynamic CGE modeling; Multiple optimizing agents; Transport costs (search for similar items in EconPapers)
JEL-codes: C68 O41 R13 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999312003872
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:31:y:2013:i:c:p:389-400

DOI: 10.1016/j.econmod.2012.11.031

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().