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A standard computable general equilibrium (CGE) model in GAMS

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  • Löfgren, Hans
  • Harris, Rebecca Lee
  • Robinson, Sherman

Abstract

Computable general equilibrium (CGE) models are used widely in policy analysis. The purpose of this paper is to contribute to and facilitate the use of CGE models. The paper includes a detailed presentation of a “standard” CGE model (an equation-by-equation description) and its required database. It incorporates features developed in recent years in research projects conducted at IFPRI. These features, which are of particular importance in developing countries, include household consumption of non-marketed (or “home”) commodities, explicit treatment of transaction costs for commodities that enter the market sphere, and a separation between producing activities and commodities that permits any activity to produce multiple commodities and any commodity to be produced by multiple activities. The paper discusses the implementation of the model in GAMS (the General Algebraic Modeling System) and is accompanied by a self-extracting zip file, which includes the GAMS files for the model, sample databases, simulations, solution reports, and a SAM aggregation program. Although the paper provides a standardized framework for analysis, the analyst is not forced to make “one-size-fits-all” assumptions. The GAMS code is written in a manner that gives the analyst considerable flexibility in model specification.

Suggested Citation

  • Löfgren, Hans & Harris, Rebecca Lee & Robinson, Sherman, 2001. "A standard computable general equilibrium (CGE) model in GAMS," TMD discussion papers 75, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:tmddps:75
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    References listed on IDEAS

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    1. Devarajan, Shantayanan & Lewis, Jeffrey D & Robinson, Sherman, 1993. "External Shocks, Purchasing Power Parity, and the Equilibrium Real Exchange Rate," The World Bank Economic Review, World Bank, vol. 7(1), pages 45-63, January.
    2. Victor Ginsburgh & Michiel Keyzer, 2002. "The Structure of Applied General Equilibrium Models," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262571579, December.
    3. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, January.
    4. Sherman Robinson & Andrea Cattaneo & Moataz El-Said, 2001. "Updating and Estimating a Social Accounting Matrix Using Cross Entropy Methods," Economic Systems Research, Taylor & Francis Journals, vol. 13(1), pages 47-64.
    5. Robinson, Sherman, 1991. "Macroeconomics, financial variables, and computable general equilibrium models," World Development, Elsevier, vol. 19(11), pages 1509-1525, November.
    6. Robinson, Sherman & Yunez-Naude, Antonio & Hinojosa-Ojeda, Raul & Lewis, Jeffrey D. & Devarajan, Shantayanan, 1999. "From stylized to applied models:: Building multisector CGE models for policy analysis," The North American Journal of Economics and Finance, Elsevier, vol. 10(1), pages 5-38.
    7. Robinson, Sherman, 1989. "Multisectoral models," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 2, chapter 18, pages 885-947, Elsevier.
    8. Robinson, Sherman & Roland-Holst, David W., 1988. "Macroeconomic structure and computable general equilibrium models," Journal of Policy Modeling, Elsevier, vol. 10(3), pages 353-375.
    9. Robinson, Sherman & El-Said, Moataz, 2000. "GAMS code for estimating a social accounting matrix (SAM) using cross entropy methods (CE)," TMD discussion papers 64, International Food Policy Research Institute (IFPRI).
    10. Rattso, Jorn, 1982. "Different macroclosures of the original Johansen model and their impact on policy evaluation," Journal of Policy Modeling, Elsevier, vol. 4(1), pages 85-97, March.
    11. Pyatt, Graham, 1988. "A SAM approach to modeling," Journal of Policy Modeling, Elsevier, vol. 10(3), pages 327-352.
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