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A Dynamic General Equilibrium Model of Food and Energy Crop

Author

Listed:
  • Aerwadee Premashthira

    (Faculty of Economics, Kasetsart University, Bangkok, Thailand)

  • Kenneth S. Lyon

    (Department of Applied Economics, Utah State University, Utah, USA)

Abstract

This essay develops a dynamic general equilibrium model of an energy crop. The model can guide policy to resolve the ‘food or fuel’ dilemma. Data from Thailand were employed in calibrating the model, with cassava as the energy crop. The stationary state solution gave the set of optimal consumption, production, and allocation of resources in the economy. An approximation of optimal policy function and optimal time paths was derived by using the linear approximation method and the Runke-Kutta reverse shooting method. The results of the model provide the basic information for decision makers in optimal allocation of resources for the production of crops for food and biofuel

Suggested Citation

  • Aerwadee Premashthira & Kenneth S. Lyon, 2012. "A Dynamic General Equilibrium Model of Food and Energy Crop," Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 19(2), pages 18-36, December.
    • Handle: RePEc:aej:apecjn:v:19:y:2012:i:2:p:18-36
    as

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    File URL: http://www.journal.eco.ku.ac.th/upload/document/eng/20121244103644.pdf
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    References listed on IDEAS

    as
    1. Léonard,Daniel & Long,Ngo van, 1992. "Optimal Control Theory and Static Optimization in Economics," Cambridge Books, Cambridge University Press, number 9780521331586, October.
    2. Chakravorty, Ujjayant & Magné, Bertrand & Moreaux, Michel, 2008. "A dynamic model of food and clean energy," Journal of Economic Dynamics and Control, Elsevier, vol. 32(4), pages 1181-1203, April.
    3. Chen, Xiaoguang & Khanna, Madhu & Onal, Hayri, 2009. "The Economic Potential of Second-Generation Biofuels: Implications for Social Welfare, Land Use and Greenhouse Gas Emissions in Illinois," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49484, Agricultural and Applied Economics Association.
    4. Kenneth L. Judd, 1998. "Numerical Methods in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100711, April.
    5. Surach Tanboon, 2008. "The Bank of Thailand Structural Model for Policy Analysis," Working Papers 2008-06, Monetary Policy Group, Bank of Thailand.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    energy crop; optimal control; sustainable development;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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