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The Simple CGE Model

In: Textbook of Computable General Equilibrium Modelling

Author

Listed:
  • Nobuhiro Hosoe
  • Kenji Gasawa
  • Hideo Hashimoto

Abstract

In this chapter, we develop the simplest possible CGE model, hereafter called the ‘simple CGE model’, with one household, two firms, two goods (bread and milk) and two factors (capital and labour).1,2 As all the CGE models used for empirical policy analysis are extensions of this simple CGE model, it is vitally important to understand how the model is built and what implications can be derived from the equilibrium of the model.

Suggested Citation

  • Nobuhiro Hosoe & Kenji Gasawa & Hideo Hashimoto, 2010. "The Simple CGE Model," Palgrave Macmillan Books, in: Textbook of Computable General Equilibrium Modelling, chapter 2, pages 13-22, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-0-230-28165-3_2
    DOI: 10.1057/9780230281653_2
    as

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