© Scott McDonald
P5: A Simple CGE Model (smod_t)
This module brings together the closed economy and trade models from modules P1 to P4 to create a basic open economy CGE model that was typical in the late 1990s and early 2000s. It also introduces a third standard behavioural function - the Stone-Geary utility function.
Programme
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Topic |
Tasks |
Exercises |
Files (in order) |
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P5:1 |
Linear Expenditure System |
The Stone-Geary utility function and the LES |
Understanding calibration of LES functions |
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P5:2 |
Introduction to smod_t |
Model code & structure; data inputs & outputs; testing a model |
Setting up and testing a simple CGE model |
Single Country CGE Model pt 1 ppt.pdf Single Country CGE Model pt 1 ppt.mp4 Single Country CGE Model pt 2 ppt.pdf |
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P5:3 |
Trade policy experiments |
Coding policy experiments; interpreting model results |
Coding compound experiments Sensitivity to elasticities Coding macroeconomic closures Coding factor market clearing |
Readings
Pyatt, G., (1987). 'A SAM Approach to Modeling', Journal of Policy Modeling, Vol 10, pp 327-352.
Dahl, H., Devarajan, S. and van Wijnbergen, S., (1994). ‘Revenue-Neutral Tariff Reform: Theory and an Application to Cameroon’, Economic Studies Quarterly, Vol 45, pp 213-226.
Robinson, S., Yunez-Naude, A., Hinojosa-Ojeda, R., Lewis, J.D. and Devarajan, S., (1999). ‘From Stylised to Applied Models: Building Multisector CGE Models for Policy Analysis’, North America Journal of Economics and Finance, Vol 10, pp 5-38