## A Standard Computable General Equilibrium (CGE) Model in GAMSThe purpose of this manual is to contribute to and facilitate the use of computable general equilibrium (CGE) models in the analysis of issues related to food policy in developing countries. The volume includes a detailed presentation of a static standard CGE model and its required database and incorporates features of particular importance in developing countries. The manual discusses the implementation of the model in GAMS and is accompanied by a CD-ROM that includes the GAMS software (free demo system), the GAMS input files for the model, sample databases, simulations, solution reports, and a social accounting matrix (SAM) aggregation program. Although the volume provides a standardized framework for analysis, the analyst is not forced to make one-size-fits-all assumptions. The GAMS code is written to give the analyst considerable flexibility in model specification. |

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aggregate intermediate input Armington function basic model version CET function commodity aggregation function composite commodity consumer price index consumption spending data set defined direct tax rates disaggregated domestic commodity aggregation domestic institutions domestic market domestic nongovernment institutions domestic producers domestic sales elasticity endogenous enterprises exchange rate exogenous exogenous variable expenditures export export-domestic factor f Factor income factor markets first-order conditions fixed investment flexible foreign savings function exponent function share parameter function shift GAMS code government savings home commodity home consumption household consumption household consumption expenditures household h import price Include file INSDNG Leontief function macroeconomic marketed commodity marketed output ment mod.gms MPSADJ nominal absorption producer price index PXAC QINVc quantity of aggregate quantity of commodity QXAC ratio revenue sales tax savings rates sim.gms simulations sold domestically standard CGE model SUM(C technology nest trade input transaction costs transfers value-added tax

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Page 18 - ... solution listed above. In both cases, you should obtain the same ordered triples. Thus, when comparing descriptions of an infinite solution set, keep in mind that there is more than one way to describe the set. Nonsquare Systems So far, each system of linear equations has been square, which means that the number of equations is equal to the number of variables. In a nonsquare system, the number of equations differs from the number of variables. A system of linear equations cannot have a unique...

Page 3 - More technically, a SAM is a square matrix in which each account is represented by a row and a column. Each cell shows the payment from the account of its column to the account of its row.

Page 14 - ... the (current) government balance, the balance of the rest of the world (the current account of the balance of payments, which includes the trade balance), and the savings-investment balance. These closures can be adapted to incorporate the behavior of most macroeconometric models. The appropriate choice between the different macroeconomic closures depends on the context of the analysis. For example, in welfare analysis, it is commonly assumed that the account-clearing variables are government...

Page 13 - Compared with the alternative assumptions of perfect substitutability and transformability, the assumptions of imperfect transformability (between exports and domestic sales of domestic output) and imperfect substitutability (between imports and domestically sold domestic output...

Page 7 - The enterprise sector should be disaggregated in a manner that captures differences across enterprises in terms of tax rates, savings rates, and the shares of retained earnings that are received by different household types. For example, in some settings it may be appropriate to disaggregate enterprises into...

Page vi - Lofgren, Hans, Rebecca Lee Harris, and Sherman Robinson with assistance from Marcelle Thomas and Moataz El-Said. 2002. A Standard Computable General Equilibrium (CGE) Model in GAMS. Microcomputers in Policy Research, vol. 5. Washington, DC: International Food Policy Research Institute, (http://www.ifpri.org/pubs/microcom/micro5.htm).

Page 14 - MPS is marginal propensity to save. permit the model to better reflect the empirical realities of most countries. The assumptions used give the domestic price system a degree of independence from international prices and prevent unrealistic export and import responses to economic shocks.