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Introducing CGE Models to the Classroom Using EXCEL

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  • Amy Peng

    (Department of Economics, Ryerson University, Toronto, Canada)

Abstract

This paper demonstrates how simple general equilibrium models can be solved with the help of Microsoft Excel. Two different general equilibrium models for tax incidence analysis are used as illustrative examples. The methods presented here are intended to be beneficial to both students and teachers working with general equilibrium theory in the classroom and can easily be extended to various policy analysis term projects. The techniques presented here are simple and effective tools for inclusion in any student’s toolkit.

Suggested Citation

  • Amy Peng, 2009. "Introducing CGE Models to the Classroom Using EXCEL," Working Papers 013, Toronto Metropolitan University, Department of Economics.
    • Handle: RePEc:rye:wpaper:wp013
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    File URL: https://www.arts.ryerson.ca/economics/repec/pdfs/wp013.pdf
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    References listed on IDEAS

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    1. Herbert E. Scarf, 1969. "An Example of an Algorithm for Calculating General Equilibrium," Cowles Foundation Discussion Papers 276, Cowles Foundation for Research in Economics, Yale University.
    2. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, vol. 70(3), pages 215-215.
    3. Wai-Yan Cheng & Carles Fan, 2001. "Comparison Study of Different Implementations of Derivative Pricing Models," The Journal of Economic Education, Taylor & Francis Journals, vol. 32(2), pages 192-192, January.
    4. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    5. Patrick J. Kehoe & Timothy J. Kehoe, 1994. "A primer on static applied general equilibrium models," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 18(Spr), pages 2-16.
    6. Humberto Barreto, 2001. "Teaching Comparative Statics with Microsoft Excel," The Journal of Economic Education, Taylor & Francis Journals, vol. 32(4), pages 397-397, January.
    7. Scarf, Herbert, 1969. "An Example of an Algorithm for Calculating General Equilibrium Prices," American Economic Review, American Economic Association, vol. 59(4), pages 669-677, Part I Se.
    8. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, January.
    9. 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.
    10. Soumaya M. Tohamy & J. Wilson Mixon, 2003. "Lessons from the Specific Factors Model of International Trade," The Journal of Economic Education, Taylor & Francis Journals, vol. 34(2), pages 139-150, January.
    11. Eric Nævdal, 2003. "Solving Continuous-Time Optimal-Control Problems with a Spreadsheet," The Journal of Economic Education, Taylor & Francis Journals, vol. 34(2), pages 99-122, January.
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    Cited by:

    1. Xinru Han & Yongfu Chen & Xiudong Wang, 2022. "Impacts of China’s bioethanol policy on the global maize market: a partial equilibrium analysis to 2030," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(1), pages 147-163, February.

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    More about this item

    Keywords

    Excel; Solver; General Equilibrium; Optimization; Newton’s Method;
    All these keywords.

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • A23 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Graduate
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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