Presentation of the Three-ME model: Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policy

Frédéric Reynès (), Yasser Yeddir-Tamsamani () and Gaël Callonec ()
Additional contact information
Yasser Yeddir-Tamsamani: Observatoire Français des Conjonctures Économiques, Postal: 69, Quai d'Orsay, Paris 75007, France, http://www.ofce.sciences-po.fr
Gaël Callonec: Agence de l'environnement et de la maîtrise de l'énergie, Postal: 27, rue Louis Vicat, 75737 PARIS cedex 15, France, http://www2.ademe.fr

No 2011-10, Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE)

Abstract: This paper presents the structure and the main properties of Three-ME. This new model of the French economy has been especially designed to evaluate the medium and long term impact of environmental and energy policies at the macroeconomic and sector levels. To do so Three-ME combines two important features. Firstly, it has the main characteristics of neo-Keynesian models by assuming a slow adjustment of effective quantities and prices to their notional level. Compared to standard multi-sectors CGEM, this has the advantage to allow for the existence of under-optimum equilibriums such as the presence of involuntary unemployment. Secondly, production and consumption structures are represented with a generalized CES function which allows for the elasticity of substitution to differ between each couple of inputs or goods. This is an improvement compared to the standard approach that uses nested CES functions which has the disadvantage to impose a common elasticity of substitution between the goods located in two different nested structures.

Keywords: neo-Keynesian model; macroeconomic modeling; energy and environmental policy modeling (search for similar items in EconPapers)
JEL-codes: D57 D58 E12 E17 E27 E37 E47 (search for similar items in EconPapers)
Date: 2011-05
New Economics Papers: this item is included in nep-ene, nep-env and nep-mac
References: View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:fce:doctra:1110

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