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An Economic General Equilibrium Model for Evaluation of Production Support Policies in Developing Countries

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  • Haqiqi, Iman
  • Bahalou, Marziyeh
  • Shamsaee, Arezoo

Abstract

This paper introduces a Computable General Equilibrium (CGE) model for the evaluation of production support policies in developing countries. It is a multi-sector, multi-market, multi-household model appropriate for what-if policy analysis. We describe the main aspects of the model. The model assumes small open economy, imperfect capital mobility, imperfect substitution between imported and domestic commodity, nested CES structure in production, nested CES structure in consumption, and heterogeneity of domestic products in one category. We consider transport margin, wholesale margin, import tariffs, import subsidy, production tax, value added tax, goods and services tax, and other transfer payments. We calibrate the model based on the 2001 Micro Consistent Matrix of Iran. The initial validation tests approve the validity of the model.

Suggested Citation

  • Haqiqi, Iman & Bahalou, Marziyeh & Shamsaee, Arezoo, 2017. "An Economic General Equilibrium Model for Evaluation of Production Support Policies in Developing Countries," MPRA Paper 95865, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:95865
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    References listed on IDEAS

    as
    1. Haqiqi, Iman & Manzoor, Davood & Aghababaei, Mohammad, 2013. "Impacts of Electricity Efficiency Improvements on Factors Market: A Computable General Equilibrium Approach," MPRA Paper 95825, University Library of Munich, Germany.
    2. Asghar, Shahmoradi & Iman, Haqiqi & Zahedi, Raziyeh, 2011. "Impact Analysis of Energy Price Reform and Cash Subsidy Payment in Iran: A CGE Approach," MPRA Paper 95809, University Library of Munich, Germany.
    3. Haqiqi, Iman & Mortazavi Kakhaki, Morteza, 2012. "The Impact of Redistribution of Opportunities on Income Inequality: A CGE Approach," MPRA Paper 95819, University Library of Munich, Germany.
    4. Haqiqi, Iman & Bahalou, Marziyeh, 2015. "A General Equilibrium Analysis of Unskilled Labor Entry and Skilled Labor Exit in Iran," MPRA Paper 95781, University Library of Munich, Germany.
    5. Manzoor, Davood & Haqiqi, Iman & Aghababaei, Mohammad, 2012. "Decomposing Electricity Demand Elasticity in Iran: Computable General Equilibrium Approach," MPRA Paper 95817, University Library of Munich, Germany.
    6. Haqiqi, Iman & Manzoor, Davood, 2012. "Environmental Impacts of Phasing out Energy Subsidies," MPRA Paper 95688, University Library of Munich, Germany, revised 2016.
    7. Manzoor, Davood & Haqiqi, Iman & Aghababaei, Mohammad, 2013. "Economic Impacts of Investment in the Electricity Industry: A CGE Comparison of Regulated and Free Markets," MPRA Paper 95823, University Library of Munich, Germany.
    8. Davood, Manzoor & Asghar, Shahmoradi & Iman, Haqiqi, 2010. "An Assessment of the Impact of Reducing Implicit and Explicit Energy Subsidies in Iran; Using a Computable General Equilibrium Model Based on a Modified Micro Consistent Matrix," MPRA Paper 95808, University Library of Munich, Germany.
    9. Davood, Manzoor & Mohammad, Aghababaei & Haqiqi, Iman, 2011. "Rebound Effects Analysis of Electricity Efficiency Improvements in Iran: A Computable General Equilibrium Approach," MPRA Paper 95810, University Library of Munich, Germany.
    10. Manzoor, Davood & Haqiqi, Iman & Aghababaei, Mohammad, 2012. "Modeling Dutch Disease in the Economy of Iran: A Computable General Equilibrium Approach," MPRA Paper 95821, University Library of Munich, Germany.
    11. Manzoor, Davood & Haqiqi, Iman, 2012. "Impact of Energy Price Reform on Environmental Emissions; A Computable General Equilibrium Approach," MPRA Paper 95818, University Library of Munich, Germany.
    12. Haqiqi, Iman & Aghanazari, Hasan & Sharzei, Gholamali, 2013. "Natural Resources Revenue Allocation: A Dynamic General Equilibrium Approach," MPRA Paper 95785, University Library of Munich, Germany.
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    Cited by:

    1. Haqiqi, Iman & Yasharel, Sepideh, 2018. "Removing Fossil Fuel Subsidies to Help the Poor," MPRA Paper 95907, University Library of Munich, Germany.

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    More about this item

    Keywords

    Computable General Equilibrium; tax policy; industrial policy; production support; Iran;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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