Modeling the Global Economy – Forward-Looking Scenarios for Agriculture

The development of global computable general equilibrium (CGE) models lagged behind development of national models as globally consistent datasets were not readily available and software and hardware were generally not up to the task. As the latter improved and data became more readily available – particularly through the efforts of the GTAP consortium – the use of global CGE models to examine critical economic policies of an international or a global nature exploded in the 1990s. The catalysts of the use of global CGE models were international trade negotiations in the form of the Uruguay Round and the rising concern over global warming. Over the last two decades global CGE models have expanded in size, complexity and the range of policy issues including bilateral and regional trade agreements, the role of trade preferences, trade in services, international migration, foreign direct investment, cross-border environmental issues, structural transformation, demographics and more. This chapter is focused on work largely undertaken at the World Bank over the last decade using the ENVISAGE model with a focus on long-run dynamics, impacts on agriculture and interactions with climate change.