IDEAS home Printed from https://ideas.repec.org/a/rom/merase/v9y2024i1p158-167.html
   My bibliography  Save this article

Computable General Equilibrium (CGE) Models: A Comprehensive Review and Future Directions

Author

Listed:
  • Taiwo BOLARINWA

    (University of Abuja, Nigeria)

Abstract

This comprehensive analysis delves into the landscape of Computable General Equilibrium (CGE) models, examining their historical development, key components, applications, strengths, limitations, and future directions. CGE models have become indispensable tools for understanding the intricate dynamics of modern economic systems, offering a holistic perspective that considers the complex interactions among sectors, households, and governments. The study reveals the strengths of CGE models, including their capacity to provide a comprehensive view of the economy, analyse policy interactions, and incorporate behavioural responses. However, challenges such as data limitations and simplifying assumptions pose inherent limitations. The analysis identifies promising future directions, including the integration of machine learning, leveraging big data, and advancing computational power. By addressing current challenges and embracing these innovations, CGE models can continue to play a pivotal role in economic analysis and policymaking, navigating the complexities of a dynamic and evolving economic landscape.

Suggested Citation

  • Taiwo BOLARINWA, 2024. "Computable General Equilibrium (CGE) Models: A Comprehensive Review and Future Directions," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 9(1), pages 158-167, February.
  • Handle: RePEc:rom:merase:v:9:y:2024:i:1:p:158-167
    as

    Download full text from publisher

    File URL: https://mer.ase.ro/files/2024-1/9-1-10.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Browning, Edgar K, 1987. "On the Marginal Welfare Cost of Taxation," American Economic Review, American Economic Association, vol. 77(1), pages 11-23, March.
    2. Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Springer;Society for Computational Economics, vol. 14(1-2), pages 1-46, October.
    3. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    4. Glenn W. Harrison & Thomas F. Rutherford & David G. Tarr, 2014. "Trade liberalization, poverty and efficient equity," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 11, pages 255-286, World Scientific Publishing Co. Pte. Ltd..
    5. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
    6. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-1051, September.
    7. Deaton, Angus, 1992. "Understanding Consumption," OUP Catalogue, Oxford University Press, number 9780198288244.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin, Will, 2021. "Tools for measuring the full impacts of agricultural interventions," IFPRI-MCC technical papers 2, International Food Policy Research Institute (IFPRI).
    2. Robson, Edward N. & Wijayaratna, Kasun P. & Dixit, Vinayak V., 2018. "A review of computable general equilibrium models for transport and their applications in appraisal," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 31-53.
    3. James Markusen & Thomas F. Rutherford & David Tarr, 2017. "Trade and direct investment in producer services and the domestic market for expertise," World Scientific Book Chapters, in: Trade Policies for Development and Transition, chapter 19, pages 439-458, World Scientific Publishing Co. Pte. Ltd..
    4. Rivera, Sandra A. & Tsigas, Marinos E., 2005. "How does China’s growth affect India? An Economywide Analysis," Conference papers 331359, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Tarr, David G., 2013. "Putting Services and Foreign Direct Investment with Endogenous Productivity Effects in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 303-377, Elsevier.
    6. Karplus, Valerie J. & Paltsev, Sergey & Babiker, Mustafa & Reilly, John M., 2013. "Applying engineering and fleet detail to represent passenger vehicle transport in a computable general equilibrium model," Economic Modelling, Elsevier, vol. 30(C), pages 295-305.
    7. Rutherford, Thomas & Tarr, David, 2008. "Regional household and poverty effects of Russia's accession to the world trade organization," Policy Research Working Paper Series 4570, The World Bank.
    8. Osman, Rehab Osman Mohamed, 2012. "The EU Economic Partnership Agreements with Southern Africa: a computable general equilibrium analysis," Economics PhD Theses 0412, Department of Economics, University of Sussex Business School.
    9. Bretschger, Lucas & Lechthaler, Filippo & Rausch, Sebastian & Zhang, Lin, 2017. "Knowledge diffusion, endogenous growth, and the costs of global climate policy," European Economic Review, Elsevier, vol. 93(C), pages 47-72.
    10. Javier Ferri & Antonio G. Gómez-Plana & Joan Martín-Montaner, "undated". "International inmigration and mobility across sectors: an exploration of alternative scenarios for Spain," Studies on the Spanish Economy 124, FEDEA.
    11. Mutambatsere, Emelly, 2006. "Trade Policy Reforms in the Cereals Sector of the SADC Region: Implications on Food Security," Working Papers 127055, Cornell University, Department of Applied Economics and Management.
    12. James R. Markusen & Thomas F. Rutherford & David Tarr, 2000. "Foreign Direct Investments in Services and the Domestic Market for Expertise," NBER Working Papers 7700, National Bureau of Economic Research, Inc.
    13. Travis Warziniack & David Finnoff & Jonathan Bossenbroek & Jason Shogren & David Lodge, 2011. "Stepping Stones for Biological Invasion: A Bioeconomic Model of Transferable Risk," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(4), pages 605-627, December.
    14. Bouzahzah, Mohamed & Esmaeili, Hamid & Ihadiyan, Abid, 2007. "Ouverture commerciale et migration," L'Actualité Economique, Société Canadienne de Science Economique, vol. 83(1), pages 71-90, mars.
    15. Thomas F. Rutherford & David G. Tarr, 2014. "Poverty effects of Russia's WTO accession: Modeling “real” households with endogenous productivity effects," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 12, pages 287-306, World Scientific Publishing Co. Pte. Ltd..
    16. Ahmed, Vaqar & O' Donoghue, Cathal, 2007. "CGE-Microsimulation Modelling: A Survey," MPRA Paper 9307, University Library of Munich, Germany.
    17. Karplus, Valerie J. & Paltsev, Sergey & Babiker, Mustafa & Reilly, John M., 2013. "Should a vehicle fuel economy standard be combined with an economy-wide greenhouse gas emissions constraint? Implications for energy and climate policy in the United States," Energy Economics, Elsevier, vol. 36(C), pages 322-333.
    18. Fullerton, Don & Metcalf, Gilbert E., 2002. "Tax incidence," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 26, pages 1787-1872, Elsevier.
    19. Fullerton, Don & Ta, Chi L., 2019. "Environmental policy on the back of an envelope: A Cobb-Douglas model is not just a teaching tool," Energy Economics, Elsevier, vol. 84(S1).
    20. Jesper Jensen & Thomas Rutherford & David Tarr, 2014. "The Impact of Liberalizing Barriers to Foreign Direct Investment in Services: The Case of Russian Accession to the World Trade Organization," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 6, pages 125-149, World Scientific Publishing Co. Pte. Ltd..

    More about this item

    Keywords

    Economic landscape; Computable General Equilibrium (CGE); Computational power; Policy interactions.;
    All these keywords.

    JEL classification:

    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rom:merase:v:9:y:2024:i:1:p:158-167. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ciocoiu Nadia Carmen (email available below). General contact details of provider: https://edirc.repec.org/data/mnasero.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.