A flexible, modular and extendable framework for CGE analysis in GAMS

Wolfgang Britz and Dominique van der Mensbrugghe

No 332918, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: We present a GAMS based framework for Computable General Equilibrium analysis which can be flexibly configured to depict different nestings in production and factor supply, while allowing a choice between different functional forms for demand and modeling international trade sectors (Armington, Armington plus CET, Melitz and Krugmann model). Either a regional household approach or separate accounts for government and potentially multiple private household with related closures are available. Supply and factor markets can be dis-aggregated to sub-regions. We compare the layout of different well-known global and single country CGE models and discuss to what extent our flexible framework can replicate these features. In a structural sensitivity analysis, we compare major results of test shocks (multi-lateral trade liberalization and endowment changes in one country) by our framework under different configuration. These reflect important structural differences between the chosen examples as well as additional features such as the Melitz model or endogenous capital stocks driven by investments in a comparative-static setting. We find relative limited differences between models based on the Armington assumption, even if other features differ such as closures, the production function nesting, allowing for substitution on different nodes of the nest, for sluggish factor supply between agricultural and non-agricultural sectors and other elements such as the functional form in demand. A discussion on further joint development of such a framework leads to our summary and conclusions.

Keywords: Research; Methods/Statistical; Methods (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332918

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