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Spatial networks in multi-region computable general equilibrium models

Hans Lofgren and Sherman Robinson ()

No 35, TMD discussion papers from International Food Policy Research Institute (IFPRI)

Abstract: The spatial dimension of economic policy is often important. However, as opposed to partial-equilibrium multi-region programming models, existing multi-region Computable General Equilibrium (CGE) models have rarely explicitly treated geographical space. This paper develops a spatial-network, mixed-complementarity CGE model that combines the strengths of CGE and partial-equilibrium programming models. We implement the model with a prototype data set for a stylized, poor, developing country with rural regions linked to an urban region that provides the gateway to international markets. We demonstrate that the model provides a good framework for analyzing the impact of higher world prices and reduced domestic transportation costs.

Keywords: Equilibrium (Economics); Economic policy.; Spatial analysis (Statistics); Computable general equilibrium (CGE). (search for similar items in EconPapers)
Date: 1999
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