How Water Flows Through CGE Models: A Systematic Review

Martin Henseler (), Hélène Maisonnave and Enzo Salvatore ()
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Martin Henseler: LERN - Laboratoire d'Economie Rouen Normandie - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université
Enzo Salvatore: LERN - Laboratoire d'Economie Rouen Normandie - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université

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Abstract: Water scarcity, climate change, and pollution increasingly threaten ecosystems and economies, requiring tools that capture their complex interactions. Computable General Equilibrium (CGE) models are widely applied for this purpose, linking water resources with production, households, and trade. Despite rapid growth since 1995, research remains fragmented and methodologically diverse. Our review of studies from 1995-2025 shows strong expansion after 2010, with emphasis on climate change, scarcity, and resource management, but limited focus on floods, pollution, and household impacts. Regionally, Asia-especially China-dominates, while Africa and hydrological regions such as river basins are underrepresented. Representation of water as a production factor shows both flexibility and variation across studies. Advancing CGE-water research will require greater methodological standardisation, stronger integration with hydrological models, and broader regional coverage.

Keywords: water; WEFE-nexus; economic assessment; simulation; literature review (search for similar items in EconPapers)
Date: 2025-09-13
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