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Paper presented at EconAnadolu 2009: Anadolu International Conference in Economics June 17-19, 2009, Eskişehir, Turkey.

A Two Period Comparison of Computable General Equilibrium Models on Developing Countries: A Random Survey Seçkin Sunal ∗ Department of Economics, Yıldız Technical University, Istanbul e-mail: [email protected] Abstract Use of computable general equilibrium (CGE) models in analyzing development policies has long been a popular approach. The first models about economic policy issues of developing countries can be dated as far as 1960’s. Since then, a wide span of modelling techniques, model specifications and a variety of subjects have extensively been cherished by economists. In this study a comparison is made between development-oriented CGE models that have been built before and after 1990. The periodization is formed according to the differences observed in CGE models in terms of model specifications, modelling approaches, issues analyzed and techniques used. Studies that are subject to comparison are selected in a dual way: The publications that belong to the period before 1990 are selected from surveys by S. Robinson, J. de Melo and mostly from J. S. Bandara, that are well known to and heavily cited by practitioners of the field. Publications of the second period (after 1990) are selected by a relatively random method. A query for the phrase “computable general equilibrium” is run in the databases of “RePEc”, “ABI Inform Global”, “Academic Search Complete”, “Cambridge Journals Online”, “EconLit with Full Text”, “JSTOR”, “Oxford University Press Journals”, “ScienceDirect Journals”, “SpringerLink” and “Wiley InterScience Journals”. Among the lists reported, the first hundred articles that analyze developing countries are selected. A table that summarizes these models is given at the appendix. The comparison revealed that there are considerable differences between CGE models on developing countries in terms of modelling approaches, issues spotted, inclusion of money in models and several other characteristics.

Keywords:

Computable General Equilibrium Models, Developing Countries, Model Comparison

JEL Codes:

C68, D58, O12

∗

Ph. D., Yıldız Technical University, Department of Economics, e-mail: [email protected],Yıldız Kampüsü H-Blok 34349,Yıldız-Beşiktaş,İstanbul/Türkiye, Telf:+90 0.212.3832535

Paper presented at EconAnadolu 2009: Anadolu International Conference in Economics June 17-19, 2009, Eskişehir, Turkey.

I.

Introduction

For economists, multisectoral models constitute a major field of interest for more than half a century. Following the well known work of Leontief that initiates an intense research on input-output analysis, analyzing sectoral dependencies and flows among major blocks of the economy has become a lucrative practice. What makes multisectoral models such indispensable is their potential to enable the researcher to capture the relations between parts of the economy, which otherwise would be very ambiguous and cumbersome to unravel.

The evolution of multisectoral models follows a path from static and dynamic input-output models to computable general equilibrium (CGE) models through linear programming models which also can be built in a static or dynamic character. Static input-output models which present a snapshot view of the economy in a given time, have some shortcomings which force the economists to consider investment as exogenous. This drawback is overcome by implementation of dynamic input-output models. Despite their inherent limitations such as linearity conditions, mark-up pricing, exogenous demand (including exports) and ruling out the possibility of substitution among intermediate goods and factors of production (fixed coefficient technology), these models have generally been illuminating in analyzing the sectoral structure of an economy.

Linear programming models, on the other hand, represent a mathematically more rigorous method pioneered by the independent studies of Koopmans 1 and Kantorovich 2. Such models can be considered as special cases of mathematical programming, at which all 1

Koopmans, T. C., (1951), Analysis of Production as an Efficient Combination of Activities, in Activity Analysis of Production and Allocation, Koopmans, T. C., (ed.) (1951), John Wiley & Sons, Inc., New York, p. 33 2 Kantorovich, L. V., (1960), Mathematical Methods of Organizing and Planning Production, Management Science, Vol. 4, 1960, (the original text in Russian is published in 1939)

related functions are linear. As a consequence of linearity assumptions, objective functions and all constraints are formed by sums of decision variables multiplied by coefficients or parameters. 3 These models enable the economist to incorporate an objective function to the model of the economy and allow for optimization of desired variables. Consequently, unlike input-output tables, the planner is allowed to make selections and substitutions among a set of feasible alternatives. Compared to input-output tables, another advantage of linear programming models is that, the constraints in these models are inequalities which represent an interval or an area rather than an equation which has a unique solution representing a point in the product or factor space. Some researches also consider this strand of multisectoral analysis as the predecessor of CGE models.

The development of CGE modelling can be treated as a natural extension of input-output and LP models with the inclusion of an endogenous output and price system, neoclassical substitutability in production and demands, the optimization behaviour of individual agents and a complete treatment of income flows in an economy. 4 Input-output tables and linear programming models assume away the optimizing behaviour of agents and the interactions between markets. This characteristic makes these models more suitable for centrally planned economies or developing countries where the government still constitutes and determines a relatively large portion of economic activity. CGE models, on the other hand, incorporate independent decisions of agents who maximize their objective functions to the solution of the model. Thus, CGE models are equally applicable in central planning and market economies. 5

3

Chowdury, A., Kirkpatrick, C., (1994), Development Policy and Planning: An Introduction to Models and Techniques, London and New York: Routledge, p. 69. 4 Bandara, J. S., (1991), Computable General Equilibrium Models for Development Policy Analysis in LDC’s, Journal of Economic Surveys. Vol. 5, No. 1, 1991, p. 9. 5 Anjan Mukherji, An Introduction to General Equilibrium Analysis, New Delhi: Oxford University Pres, 1990, s. 4.

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However, until 1960’s, general equilibrium theory has mostly been discussed in terms of existence, stability, uniqueness and efficiency of equilibrium rather than planning and policy formulation. General equilibrium models have been used in spotting theoretical issues such as appropriateness of planning, stability of equilibrium in market economies, comparison of inward-looking versus export-oriented growth strategies, foreign trade policies and the like. The theory has reached a wide area of applications after the development of computable general equilibrium models and advances in computer technologies that facilitate the computations for the solution of complicated models. Essential characteristics of a CGE model can be laid down as: 6 i)

Economic actors or agents to be analysed in the model should be specified.

ii)

Behavioural rules of the agents [profit maximization, utility maximization etc.] should explicitly be specified.

iii)

Signals used by agents [mainly prices, interest rates etc.] should be specified.

iv)

“Rules of the game” according to which agents interact [market structure, institutional setting etc.] should be specified.

The major motive for building computable general equilibrium models is the need for a more precise insight about the consequences of policy changes made or planned. Though simple, partial equilibrium analysis come at the cost of limiting ceteris paribus assumptions which do not allow for analyzing the effects of more than one policy change at a time. Besides, for analyzing policy changes whose effects or magnitudes are not limited to a single sector, which should be the case in an effective economic policy, partial equilibrium is not of any practical use. To trace the effects of a significant policy change or shock

6

Robinson, S., (1986), Multisectoral Models of Developing Countries: A Survey, Department of Agricultural and Resource Economics, Working Paper No. 401, University of California, Berkeley, p. 33; also in: "Chenery, H. B., and Srinivasan, T.N., (eds.), Handbook of Development Economics, Amsterdam: NorthHolland, 1988.

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whose repercussions are expected to be observed across many sectors of the economy, CGE modelling is the most instrumental alternative.

This alone would merely be a “technical” justification for CGE modelling. However, as Derviş et al point out, CGE models contribute to policy analysis not only by helping the researchers and policy makers overcome computational difficulties but also by providing them further insights about policy formulation, which otherwise would only partially be available via stochastic models. Even in the case of using stochastic models, there would be an important cost to be paid, that is, loss of knowledge about causal mechanisms of the economy: Although theoretical reasoning and insights gained from simplified abstract models must provide the starting point, more elaborate and “realistic” analysis is also required. Intelligent policy debate and policy formulation requires knowledge of the quantitative significance of the various mechanisms analyzed by theory. Furthermore, indirect effects of policies may escape intuition and thus the attention of theorists, whereas empirical modelling can reveal their presence and importance… Models simple enough for analytic solution can seldom provide the framework for such analysis… Empirical general equilibrium models that can be solved numerically are thus useful to provide a bridge between the theorist, the planner and the practical policy maker… Disagreements and differences in policy recommendations can be traced back to specific behavioural assumptions, empirical estimates, or fundamental differences in normative goals… [CGE models] thus stand in stark contrast to the large, temporally disaggregated, macroeconomic forecasting models whose econometric specification relies heavily on lagged endogenous variables and reduced-form equations to

5

capture the role of expectations and frictions in the economy. In such models, however, it is often difficult to trace the causal mechanisms at work. 7 Another advantage of CGE models which makes them more instrumental than mathematical partial equilibrium models is that, most of the time, partial equilibrium models are built using difference equations. In the models with difference equations or other differential methods, changes in the economically modelled phenomena can be handled only at an infinitesimal level. In such models, an hypothetical equilibrium is assumed and only changes within the vicinity of this equilibrium can accurately be computed. Changes with relatively high, thus economically significant magnitudes frequently fall out of the interval where obtained results can be reliable. 8 CGE models, on the other hand, do not have such shortcomings.

CGE models can be classified into eight groups according to the problems they focus on: 9, 10

i)

Models of developing and developed countries that focus on issues of international trade, growth, economic structure and/or income distribution

ii)

Models of developed countries that focus on issues in the theory of public finance.

iii)

Multicountry international trade models that explore issues concerning the volume and direction of trade and its impact on particular regions.

Derviş, K., De Melo, J., Robinson, S., (1982), General Equilibrium Models for Development Policy, Washington DC: The World Bank, p. 2 8 Borges, A. M., (1986), Applied General Equilibrium Models: An Assessment of their Usefulness for Policy Analysis, OECD Economic Studies, No. 7, p. 18. 9 Last four groups are proposed by the author considering the outcomes obtained from the survey. The first four groups are from the classification on Derviş et al, p. 137. 10 Bandara, J. S., op. cit., p. 12. suggests a relatively different classification such as: i) Trade policy related issues ii) Income distribution iii) Issues related to external shocks and structural adjustments iv) Government fiscal policy related issues v) Choice of development strategy, long term growth, structural changes etc. 7

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II.

iv)

Single or multicountry models focusing on energy.

v)

Models on monetary policy or financial assets.

vi)

Microsimulation models

vii)

Environment models

viii)

Models for determining the effects on the economy of relatively specific or local issues.

Comparison of Models Built Before and After 1990

This study makes a two-period comparison of CGE models that analyze developing countries. The periodization takes 1990 as the benchmark year. Thus, CGE models that analyze developing countries are compared by defining the periods as “before and after 1990”. Studies that are subject to comparison are selected in a dual way: The publications that belong to the period before 1990 are selected mostly from surveys well known to and heavily cited by practitioners of the field. Surveys by J. S. Bandara and by S. Robinson that are cited above are used more frequently while some models are selected from the survey by J. de Melo 11. Considering the limitations about reaching articles which are older than 20 or 30 years, reliance on conclusions drawn in these surveys and taking some of them for granted becomes inevitable.

Models of the latter period (after 1990) are selected by a relatively random method. A query for the phrase “computable general equilibrium” is run in the databases of “RePEc”, “ABI Inform Global”, “Academic Search Complete”, “Cambridge Journals Online”, “EconLit with Full Text”, “JSTOR”, “Oxford University Press Journals”, “ScienceDirect Journals”, “SpringerLink” and “Wiley InterScience Journals”. Among the lists reported, the first hundred articles that analyze developing countries are selected.

11

Jaime de Melo, (1988), Computable General Equilibrium Models for Trade Policy Analysis in Developing Countries: A Survey, Journal of Policy Modelling, v. 10, No 4, pp. 469-503

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There is no specific development or breakthrough that strictly forces this periodization and some models whose characteristics can be associated with a period may have been built in the other period. However, the survey whose details will be laid down below reveals that, on the overall, there are differences in modelling approaches and tendencies in these periods. The aspects according to which the models will be compared can be listed as follows: i)

Theoretical paradigms

ii)

Model structures and modelling techniques

iii)

Economic phenomena being modelled

iv)

Policy issues analyzed

Although this study focuses on differences between the models, it may be more appropriate to mention on common properties first. Models built in both periods inevitably and with no exceptions have some common characteristics which can be summarized as: 12

12

i)

Explicit descriptions should be given about the behaviours of the actors in the economy. Generally households are assumed to be utility maximizers while firms are considered to be profit maximizers or cost minimizers.

ii)

They describe how demand and supply decisions made by different economic actors determine the prices of at the least some commodities and factors. For each commodity and factor they include equations ensuring that prices adjust so that demands added across all actors do not exceed total supplies.

Maurizio Grassini, Rowing Along the Computable General Equilibrium Modelling Mainstream, Intermediate International Input-Output Meeting 2004, September 2-4, 2004, Brussels, quotes from: Peter B. Dixon, Brian R. Parmenter, 1996, Computable General Equilibrium Modelling for Policy Analysis and Forecasting, Handbook of Computational Economics, Vol. 1, 1996, Amman, H.M., Kendrick, D.A., Rust, J. (Ed.) 1996, Elsevier Science B.V Source: http://www.iioa.org/pdf/Intermediate-2004/453.pdf

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iii)

1.

They produce numerical results. The coefficients and parameters in their equations are evaluated by reference to a numerical database. The central core of the database of a CGE model is usually a set of inputoutput accounts showing for a given year the flows of commodities and factors between industries, households, governments, importers and exporters.

Theoretical Paradigm

Derviş et al note that, not every CGE model has a strictly walrasian definition of equilibrium but neoclassical resource allocation theory remains the fundamental framework of analysis. Thus, “Walras rather than Keynes is the patron saint of multisector analysis”.13 Though there are numerous counter examples in both periods (especially in the second), CGE models may still be assumed to have a walrasian flavour. However, concluding that there is not a well developed modelling approach other than walrasian would be a misinterpretation.

Differences from the walrasian approach emerge from two points. The first one is the notion of equilibrium. Walrasian general equilibrium is actually an equilibrium of real flows in an economy. An alternative concept of equilibrium, which can be named as macro equilibrium, considers financial or nominal flows. A second non-walrasian equilibrium concept is that of asset markets. The third non-walrasian concept takes time and expectations into account and seeks for an intertemporal equilibrium by incorporating adaptive, rational or other forms of expectations. 14 This concept of equilibrium also sets the ground for dynamic CGE models while equilibrium in nominal macro flows or assets become the source of macro structural models which will be mentioned below.

13 14

Derviş et al, p. 3-6. Robinson, S., (1986), p. 41.

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The second point of departures from the walrasian paradigm has been observed since the years, first models that analyze developing countries have emerged. In contrast with the general view that first CGE models of developing countries have more stylized and neoclassical settings, structural variations that are assumed to be peculiar to developing countries have been incorporated into models in both periods. On the other hand, for defining a major departure from the walrasian paradigm and mentioning about an equally weighted, different strand of CGE modelling, only structural modifications can not be accepted to suffice. As revealed by the survey for the second period, though some models (especially those with imperfect information, imperfect competition, incomplete markets and non-optimizing agents) exhibit considerably different characteristics than walrasian ones, there still exist a significant number of models which preserve their walrasian characteristics.

Some of the models that have been built in the second period have walrasian structures while a greater number of models from the first period have many structural features that make them less walrasian and more realistic in capturing specific characteristics of the economies they represent. Thus, it may be inferred in advance that, a conclusion about CGE models of the second period being structurally less walrasian is not an accurate one. Robinson’s extensive survey proposes a classification of non-walrasian models such as: 15 i)

Neoclassical structural models

ii)

Micro structural models

iii)

Macro structural models

Neoclassical structuralist models are ones that accept the neoclassical model but also incorporate rigidities and imperfections that are assumed to be typical of developing 15

Robinson, S., (1986), p. 16

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countries. Micro structuralist models, on the other hand, assume further deviations from the neoclassical setting such as markets not working properly, not in equilibrium or not existing at all. Rationing and rigid prices are also issues incorporated into micro structuralist models. Macro structuralist models focus on questions of achieving equilibrium among various macro aggregates. 16 In the first period, inclusion of asset markets into macro structuralist models has been a novel but rare approach, while it has nearly become a standard in models of the second period that include money. For an example of neoclassical structuralist models, the model by Derviş et al 17 can be visited. In this stylized model, data and structural characteristics pertaining to Turkey are considered as representative of developing semi-industrialized countries. For a micro structuralist model from the former period, DeMelo and Robinson’s work 18 that analyzes three types of developing countries (primary exporter, manufacture exporter and autarkist) rather than a specific country can be viewed.

Macro structuralist models form the group that most deviates from the walrasian paradigm. The need for incorporating the nominal side of the economy asserts the building of these models. While the first two groups of models mentioned are nearly equally frequent in both periods, macro structuralist models are more frequent and more diversified in the latter period. Models by Adelman and Yeldan 19, Bautista and Thomas 20, Chitiga and Mabugu21

16

Robinson, S., op. cit., p. 42 Derviş, K., De Melo, J., Robinson, S., (1981), A General Equilibrium Analysis of Foreign Exchange Shortages in a Developing Economy, The Economic Journal, vol. 91, no. 364, pp 891-906. 18 De Melo, J., Robinson, S., (1980), Three Adjustment Policies and Income Distribution in Three Archetype Developing Economies, World Bank Staff Working Paper, no. 442. 19 Adelman, I., Yeldan, E., (2000), The Minimal Conditions for a Financial Crisis: A Multiregional Intertemporal CGE Model of the Asian Crisis, World Development, vol. 28, no. 6, pp. 1087-1100 20 Bautista, R. M., Thomas, M., (2000), Macroeconomic and Agricultural Reforms in Zimbabwe: Policy Complementarities Toward Equitable Growth, TMD Discussion Paper No. 57. 21 Chitiga, M., Mabugu, R., (2008), Evaluating the Impact of Land Redistribution: A CGE Microsimulation Application to Zimbabwe, Journal of African Economies, vol. 17, no. 4, pp. 527-549. 17

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and Nolan et al 22 can be given as examples of walrasian models from the second period, despite their novel features compared to the models from the first period, such as inclusion of financial assets or microsimulation modelling method.

It is also a common approach to classify macro CGE models according to the closure rules they employ. The closure rule selected by the modeller directly effects the solutions obtained. In comparing alternative macro specifications, it is important to distinguish between the macro equilibrating mechanisms at work and the equilibrating variables in the models. 23 However, there is not a standard rule that determines the appropriate closure for every model. The selection of closure is generally discretionary for the modeller and the modeller prefers the closure that is more instrumental for capturing the related mechanisms or the closure that he assumes to fit better to the actual economy. At this point, one can infer that, subjects frequently analyzed by model builders may make some closure rules more common while closures that are suitable for rarely analyzed subjects become less popular. For instance, in a model that is built by focusing merely on the real side of the economy and not including assets or loanable funds, neoclassical closure (savings being equal to investment) would do perfectly well. In the same setting, however, a closure that imposes exogenous investment or another one that allows for unemployment would not be inconvenient even though each of them implied a totally different process for determination of investment and expenditures. The survey reveals that, as the tendency to incorporate structural characteristics of actual economies or factors such as assets and financial intermediaries into models becomes more prominent, variety of closure rules increases.

The literature on macro closure has followed two different approaches to bringing macro features into a CGE model. In the first approach, relationships are specified among the 22

Noland, M., Robinson, S., Scatasta, M., (1996), Modelling Economic Reform in North Korea, Journal of Asian Economics, vol. 8, no. 1, pp. 15-38. 23 Robinson, S., (1986), p. 56

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macro aggregates, but their justification is based on macroeconomic theory outside of the CGE model. That is, the macro model and the CGE model is kept as separate as possible. At one extreme, all the macro variables are specified as exogenous to the CGE model. In a second approach, the CGE model is extended to include variables typically found in macro models (such as money, assets and interest rates) and to expand the notion of equilibrium to incorporate asset markets and expectations. The intent is to build CGE models which move beyond the walrasian paradigm and directly incorporate macro phenomena. 24

An instance of the first approach can be viewed in the model by Zhang 25. In order to analyze the effects on the Chinese economy of accession to WTO, the model uses a demand driven closure where fixed capital investment, foreign exchange rate and wages are fixed to benchmark values. The study is also interesting in that, it incorporates imperfect competition to the model. For an example of models from the latter period that employ the neoclassical closure rule, the model by Cororaton, 26 which analyzes the results of various experiments for the Philippines economy under the neoclassical (savings-driven) closure, government expenditure and current account deficit also being fixed, can be visited. Even in the latter period, neoclassical closure is employed in a variety of model types. The model by Decaluwé et al 27 can be an example of models that are extended versions of the standard CGE model in order to analyze economic phenomena such as general and intra-group income distribution, while still working on the neoclassical closure. For a model with a

24

Robinson, S., (1989), Computable General Equilibrium Models of Developing Countries: Stretching the Neoclassical Paradigm, Department of Agricultural and Resource Economics, Working Paper No. 513, University of California, Berkeley, p. 27, 30. 25 Zhang, H., (2004), The Impact of China’s Accession to the WTO on its Economy: An Imperfect Competitive CGE Analysis, International Economic Journal, vol. 18, no. 1, pp. 119-137. 26 Cororaton, C. B., (2003), Analyzing the Impact of Trade Reforms on Welfare and Income Distribution Using CGE Framework: The Case of the Philippines, PIDS Discussion Paper Series, no 2003-01. 27 Decaluwé, B., Savard, L., Thorbecke, E., (2005), General Equilibrium Approach for Poverty Analysis: With an Application to Cameroon, African Development Bank, Blackwell Publishing Ltd., Oxford, pp. 213-243

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more keynesian characteristic, Bandara and Griffith 28 can be visited. The model uses fixed real wage and trade deficit as a closure rule. The model is also interesting in that, it analyses a relatively new issue such as environmental consequences of technological progress and trade policies with a common type of closure.

This could be a suitable point to define the distinction between models analyzing developed and developing countries. As noted, modellers have tended to incorporate structural characteristics of specific countries into the models they have built since the beginning of modelling efforts for developing countries. On the other hand, another strand of CGE modelling that finds its roots in the well known works of Harberger 29 and Scarf 30 has strictly kept up with the walrasian approach. The model by Harberger, which analyses the effects of tax policies in a (2 x 2) framework, is one of the pioneering works in CGE modelling tradition. Following the algorithm for computation of walrasian general equilibria developed by Scarf, 31 many models of taxation and trade, similar to the one by Harberger, are built for various countries For an example, the work by Shoven and Whalley, 32 which also is a two-sector tax incidence model of the U.S. economy can be visited. Since Scarf’s algorithm is based on an Arrow-Debreu type of model, models designed to be solved with this tool can fully reflect the characteristics of walrasian general equilibrium.

28

Bandara, J. S., (1999), Can Trade Liberalization Have Environmental Benefits in Developing Country Agriculture?, Journal of Policy Modelling, vol. 21, no. 3, pp. 349-374. 29 Harberger, A. C., (1962), The Incidence of the Corporation Income Tax, Journal of Political Economy, Vol. 70, No. 3, p. 215-240. 30 Scarf, H. E., (1973), The Computation of Economic Equilibria, Yale University Press, New Heaven and London. 31 For a relatively simple treatment of this modelling approach and a survey: Shoven, J. B., Whalley, J., (1992), Applying General Equilibrium, Cambridge University Pres, Cambridge. 32 Shoven, J. B., Whalley, J., (1972), A General Equilibrium Calculation of the Effects of Differential Taxation of Income from Capital in the U.S., Cowles Foundation Discussion Papers 328, Cowles Foundation, Yale University.

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As can be seen from the survey and the proposition by Shoven and Whalley that “the explicit aim of this literature is to convert the walrasian general equilibrium structure from an abstract representation of an economy into realistic models of actual economies”, 33 this strand of CGE modelling is more involved with efficiency, resource allocation problems and welfare effects of tax and trade policies. The work by Shoven and Whalley, cited above presents two separate surveys of tax and trade policies. In these models, it is also observed that, the variable which clears the market is price rather than quantities. It could also be inferred that, due to the fallacy of deviations from the neoclassical or walrasian world existing only in developing countries, models which stem from this tradition of CGE modelling analyze developed countries rather than developing ones.

Consequently, majority of models in this survey are from another group of models, “macro CGE models” namely. These models deviate from the walrasian paradigm in that, they incorporate structural characteristics of modelled countries into their specifications. 34 Emergence of these models should not be considered as a complete departure from the walrasian notion that is the underlying paradigm in CGE modelling. Although the optimizing behaviour of agents, perfect competition or perfect substitution are left aside in some models, the concept of excess demand and defining general equilibrium as the situation where excess demand for all goods and factors equal zero is valid also in macro CGE models. However, macro CGE models, unlike those in the walrasian tradition, aim at determining the effects on the economy of various policies. Major concerns of modellers in this strand are external shocks, development strategies, income distribution, fiscal policy,

33

Shoven, J. B., Whalley, J., (1984), Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey, Journal of Economic Literature, Vol. 22, 1984, p.1007. 34 Robinson’s survey suggests a different classification. “Macro CGE models” overlap completely or partially with the groups of neoclassical structuralist, micro structuralist and macro structuralist models which were mentioned above with reference to Robinson’s classification. The classification cited here, which considers the models with neoclassical closure as walrasian models and those which employ different closures as macro CGE models, is due to: Thissen, M., (1998), A Classification of Empirical CGE Modelling, SOM Research Report 99C01, University of Groeningen, p. 4

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and most frequently, trade policies. In order to capture the effects of structural characteristics peculiar to the modelled country, these models include some ad hoc elements such as rigidities in prices and wages, imperfect substitution among factors, incomplete markets and the like. It can be concluded that, macro CGE modellers sacrifice some theoretical rigor or consistence in return for a better treatment of phenomena related to the real world. For example, in his model of Norwegian economy, which is the first CGE model ever built, 35 Johansen assumes homogeneous capital and labour while he allows for differentials in wages and returns on capital across sectors. Even though this has been a very common practice even in the first years of CGE modelling, it has been criticised by some modellers: Because of the difficulties in accommodating a wide range of empirical phenomena in model building, there is often a tendency to depart from the essential structure and graft on ad hoc portions of the model not rooted in traditional theory. These include instances where the price level affects resource allocation, exchange rates appear to have real effects, and unemployment is present. Unfortunately, the problem is, the models that make major departures from known theoretical structures can become difficult to interpret. The conflict between modellers' desires to build realistic models which seek to capture real features of the policy issue at hand, and to stay within the realm of developed economic theory is something that seems to be increasingly apparent in some of the more recent models. 36

2.

Model Structures and Modelling Techniques

It is a difficult task to make a distinction between the theoretical paradigm underlying CGE models and the structures of these models, since the theory has strong implications on 35 36

Johansen, L., (1960), A Multi-Sectoral Study of Economic Growth, Amsterdam: North-Holland Shoven, J. B., Whalley, J., (1984), p. 1046.

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functional forms and closures. However, comparisons in terms of some characteristics, that are independent of the underlying theory, can be made. For instance, notion of time and treatment of intertemporal equilibrium is quite different among the periods. Microsimulation models also constitute a novel field of CGE modelling. Treatment of foreign trade, disaggregation levels (number of sectors analyzed) and functional forms used in the models can be other elements to be compared.

Capturing the relations between model variables through a certain time horizon is a desirable feature in a CGE model. However, using dynamic models for policy analysis in developing countries is not a widespread practice in the first period. Most dynamic models, built in this first period are of the strand “recursive dynamic models”. Time is incorporated into CGE models in two ways: The first one is “recursive” or “myopic” dynamic method, that assumes adaptive expectations and deals with one period at a time. “Intertemporal” dynamic method, on the other hand, defines a static model of the economy and makes further definitions of how intertemporal linkages between the variables of the model work. In this method, agents are assumed to have a consistent model of he economy and use their projections of future prices in order to realize market clearing prices in every period. Both approaches are used in both periods. However, use of recursive dynamic models seems to be more frequent than intertemporal dynamic models. Additionally, use of dynamic models, both recursive and intertemporal, seem to be more frequent in the latter period. For the first period, Bandara has surveyed three intertemporal dynamic models 37 while Robinson has cited one recursive dynamic model and added that no long run intertemporal dynamic model of a developing country that incorporates assets markets existed as of 1989 38.

37 38

Bandara, J. S., op. cit., p. 16. Robinson, S., (1989), p. 32,33.

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In the survey for the latter period, many more dynamic models are cited. For examples of recursive dynamic models, the study by Thurlow 39 which analyzes the South African economy, and the study by Lay et al 40 which analyzes Bolivian economy in terms of income distribution and labour market, under a scenario of positive shock related with natural resources (natural gas, petroleum) of the country, can be visited. For additional examples from the latter period, two multi-regional studies can be viewed; one is by Wang 41 and it analyzes the effects of China’s accession to the WTO but does not give any information about the model specification. The other example is by Kim and Kim, 42 which analyzes the effects of regional development plans pursued by the Korean government.

Intertemporal dynamic models are more frequent in the second period. For instances of this dynamic CGE model type, studies by Adelman and Yeldan, 43 and Feltenstein and Sarangi 44 can be visited. The former model replicates the conditions of Asian crisis under various scenarios regarding the public authority on financial markets. The latter analyzes the dynamic effects of a rise in government investment expenditures and a technological shock that requires 20% less value added for production in electric, water and communication industries. Another example can be the model of Turkish economy by Doğruel et al,45 which analyzes welfare effects of i) total abolishment of agricultural subsidies, ii) direct

39

Thurlow, J., (2004), A Dynamic Computable General Equilibrium (CGE) Model for South Africa: Extending the Static IFPRI Model, The Industrial Policy Strategies Working Paper 1-2004. 40 Lay, J., Thiele, R., Wiebelt, M., (2008), Resource Booms, Inequality and Poverty: The Case of Gas in Bolivia, Review of Income and Wealth, vol. 54, no. 3, pp. 407-437. 41 Wang, Z.,. (2003), The Impact of China’s WTO Accession on Patterns of World Trade, Journal of Policy Modelling,. vol. 25, pp. 1-41. 42 Kim, E., Kim, K., (2002), Impacts of Regional Development Strategies on Growth and Equity of Korea: A Multiregional CGE Model, Annuals of Regional Science. vol.36, pp.165-180. 43 Adelman, I., Yeldan, E., (2000), The Minimal Conditions for a Financial Crisis: A Multiregional Intertemporal CGE Model of the Asian Crisis, World Development. vol. 28, no. 6, pp. 1087-1100. 44 Feltenstein, A., Sudipta S., (2002), Macroeconomic Stabilization and Economic Growth: Analysis of Reform Policies in Tanzania, Journal of Policy Modelling. vol.24, pp. 503-521. 45 Doğruel, F., Doğruel, A. S., Yeldan, E. (2003), Macroeconomics of Turkey’s Agricultural Reforms: an Intertemporal Computable General Equilibrium Analysis, Journal of Policy Modelling, vol. 25, pp. 617637.

18

income payments equivalent to current price supports, iii) reducing direct income payments to half the level of current support paid in the form of price supports.

As mentioned above, the latter period has witnessed the emergence of a new CGE modelling approach, microsimulation namely. Microsimulation models have been built since 1960’s but incorporation of microsimulation elements into CGE models is a new practice. For information about development and techniques of microsimulation, the paper by Davies, 46 for a recent survey of CGE models that incorporate microsimulation techniques, the study by Ahmed and O’Donoghue 47 can be visited. Before analyzing microsimulation models, the motives that assert their emergence should be laid down, which actually should be the subject of next section.

Distributional issues has long been an important subject in economics. However, CGE models have generally concentrated on efficiency, allocation, structural change and trade rather than distribution until 1970’s. The first models that analyze distributional consequences of policies have tended to disaggregate the household sector into two or more, but rarely more than 10 subgroups based on regional, occupational, demographical or socioeconomic status. For a model that analyzes welfare and distributional consequences of various trade policies in Bangladesh, the model by Keyzer 48 can be viewed. This model disaggregates the household sector into 10 groups. Additionally, well known studies by Taylor et al 49 and Adelman and Robinson 50 (surveyed both by Bandara and Robinson) can 46

Davies, J. B., (2004), Microsimulation, CGE and Macro Modelling for Transition and Developing Economies, WIDER Discussion Paper No 2004/08. 47 Ahmed, V., O’Donoghue, C., (2007), CGE-Microsimulation Modelling: A Survey, MPRA Paper No. 9307 48 Keyzer, M. A., (1986), Short-run Impact of Trade Liberalization Measures on the Economy of Bangladesh: Exercises in Comparative Statics for the year 1977 in Srinivasan, T. N., Whalley, J. (eds.), General Equilibrium Trade Policy Modelling, Cambridge: The MIT Press, pp. 251-282 49 Taylor, L., Bacha, E., Cardoso, E. A., Lysy, F. J., (1980), Models of Growth and Distribution for Brazil, New York: Oxford University Press.

19

be viewed. In Adelman and Robinson’s model of South Korean economy, household sector is divided into 15 groups and effects of 26 different policies on income distribution are analyzed. The model by Taylor et al analyzes the effects of various institutional changes on income distribution in Brazilian economy at a disaggregation level of 4 household groups and 25 production sectors.

Microsimulation models incorporate a much higher level of disaggregation. The difference is not only in the number of subgroups but also in the way they are treated. In the models mentioned above, household groups are composed of representative agents. Such a treatment of households implies that, changes or distributional figures related to a group are assumed to be homogeneous through the entire group. For instance, a policy change that increases the incomes of a particular household group is accepted to increase the income of all individuals belonging to that group at a uniform rate. However, actual outcomes and incidences of policies happen to be various for winners and losers within the same subgroup. Microsimulation CGE models allow the modeller to trace the effects of policy changes on very specifically defined groups or even individuals.

For an instance of microsimulation CGE models with high number of households, the model by Cororaton and Cockburn 51 can be visited. The model incorporates the information gathered from Family Income and Ependiture survey (FIES) of 24,797 households to the SAM used in the model and makes policy experiments related to tariff reductions and trade liberalizations in the Philippines. This study does not give any explicit information about the specification of the model or about SAM used. For information about this particular model and general microsimulation models, a former study by the same 50

Adelman, I., Robinson, S., (1978), Income Distribution Policy in Developing Countries: A Case Study of Korea, Stanford, California: Stanford University Press. 51 Cororaton, C. B., Cockburn, J., (2007), Trade Reform and Poverty-Lessons From the Philippines: A CGE Microsimulation Analysis, Journal of Policy Modelling, vol. 29, pp. 141-163

20

authors, 52 which is not listed in the appendix, can be visited. The model by Rutherford and Tarr, 53 incorporates the information about 55,098 individuals into a CGE model, in order to analyze the effects of Russia’s accession to WTO, on income distribution of households. Another application of microsimulation techniques from the latter period is the model by Hérault 54. The model utilizes the information about 26,000 households (104,000 individuals) from Income and Expenditure Survey and Labour Force Survey for South Africa. Recent microsimulation models surveyed are those by Chitiga and Mabugu, 55 Fuji and Roland-Holst, 56 and Lay et al 57.

Foreign trade was and still is the most frequently analyzed subject of CGE modelling. Treatment of and assumptions about foreign trade have strong implications on model structures. In a model that assumes perfect substitutability between domestic and foreign goods, demand for imports would either be zero or totally replace the demand for domestic products, depending on the terms of trade, exchange rates or other factors related to foreign trade. If perfect complementarity were assumed, on the other hand, demand for imports would be irresponsive to changes in terms of trade. This difficulty is overcome by using Armington assumption in both periods. Armington assumption implies imperfect

52

Cororaton, C. B., Cockburn, J., (2005), Trade Reform and Poverty in the Philippines: A Computable General Equilibrium Microsimulation Analysis, Working Paper 05-13, CIRPEE, Université Laval, Canada. http://www.132.203.59.36/CIRPEE/cahierscirpee/2005/files/CIRPEE05-13.pdf. 53 Rutherford, T. F., Tarr, D. G., (2008), Poverty Effects of Russia’s WTO Accession: Modelling “Real” Households with Endogenous Productivity Effects, Journal of International Economics, vol. 75, pp. 131150. 54 Hérault, N. (2006), Building and Linking a Microsimulation Model to a CGE Model for South Africa, South African Journal of Economics, vol. 74, no. 1, pp. 34-58. 55 Chitiga, M., Mabugu, R., (2008), Evaluating the Impact of Land Redistribution: A CGE Microsimulation Application to Zimbabwe, Journal of African Economies, vol.17, no. 4, pp. 527-549. 56 Fujii, T., Roland-Holst, D., (2008), How Does Vietnam’s Accession to the World Trade Organization Change the Spatial Incidence of Poverty?, The World Bank Development Research Group, Policy Research Working Paper No. 4521. 57 Lay, J., Thiele, R., Wiebelt, M., (2008), Resource Booms, Inequality and Poverty: The Case of Gas in Bolivia, Review of Income and Wealth, vol. 54, no. 3, pp. 407-437.

21

substitution between domestically produced and imported goods in order to eliminate excessively reactionary or irresponsive reception of changes in terms of trade or trade policies. This approach also explains the frequently observed situation known as “crosshauling”, in which a country imports and exports a certain product within the same period. Thus, leaving aside few models that assume exports as exogenous (the survey by Bandara and especially the one by De Melo mention some of these models), Armington assumption is the standard way of treating foreign trade in both periods.

Disaggregation levels of models built in both periods are very variable. Especially production is disaggregated at different levels in both periods. Regarding Bandara’s survey, the highest number of production sectors in the former period is 65. The same model 58 has the highest level of disaggregation also at the demand side. The model has 200 groups of households. Variability of number of sectors is nearly the same in the latter period. However, models with more than 20 sectors are more frequent. The highest number of production sectors is observed in the model by Fuji and Roland-Holst which had been cited among microsimulation models. The model is extraordinary for its level of disaggregation in other respects too. The model incorporates 97 production activities and commodities, 13 factors of production (labour and capital), 5 household types and 94 international trading partners. Leaving aside microsimulation models of the latter period, the model by Bourguignion still has the highest level of disaggregation at the demand side. Another difference observed in the latter period is that, many models apply a disaggregation strategy in terms of geographical regions. For an instance of high disaggregation, the work by Wang 59 can be visited. The model analyzes the effects of China’s accession to WTO by 17 regions and 25 sectors.

58

Bourguignion, F., Michel, G., Miqueu, D., (1983), Short-run Rigidities and Long-run Adjustments in a Computable General Equilibrium Model of Income Distribution and Development, Journal of Development Economics, vol. 13, pp. 21-43. 59 Wang, Z., (2003), The Impact of China’s WTO Accession on Patterns of World Trade, Journal of Policy Modelling. vol. 25, s. 1-41.

22

Also a variety of functional forms is observed in both periods. Tools for CGE modelling had been well developed even in the former period. As a consequence of this, during their efforts on analyzing production or consumption in an economy, model builders cherished different functional forms in both periods. However, CES, Cobb-Douglas and Leontief production or utility functions are found out to be the most frequently utilized functional forms. Another observation on functional forms is that, demand side is analyzed with a more diversified set of functional forms in both periods, while production is modelled with more standard functions. Nested production and utility structures are also frequently used in both periods.

For information on authors, data sources, base years, disaggregation levels, functional forms, policy issues, simulations made and countries that are analyzed by models in the first period, Table 1 in Bandara’s survey is of great use. For the same information about models built in the second period, the appendix to this paper can be used.

3.

Economic Phenomena Being Modelled

Most significant difference between the models of two periods is observed in the way money is handled. Inclusion of money is not a common practice in the models of the former period. These models generally depict the equilibrium in the real side of the economy and consider money as neutral. Thus, in these models, changes only in relative prices have effects on the composition of output and consumption, while changes in money supply, consequently nominal prices, do not have any real effects on the economy. this has been an

23

important point of criticism about CGE modelling. However, Derviş et al rationalize the exclusion of money from CGE models this way: 60 The interaction between money and the real sphere of the economy is still a very difficult area of theory –as the largely unresolved literature on including money in a general equilibrium model and on the micro foundations of Keynesian macroeconomics attests. We feel that interweaving a simplistic and ad hoc macro money model with the microeconomic general equilibrium model may often detract from the usefulness of the latter as a planning tool focusing on multisector issues of growth, resource allocation, and structural change.

Derviş et al also mention about two methods for incorporating money into CGE models. The first is using price normalization as a choice of numéraire, by which the economy actually remains as a barter economy and using the model for analyzing macro or monetary issues such as inflation is not possible. The second approach is to add a macro monetary superstructure that interacts with the multisector general equilibrium model. This approach has the advantage of extending the field of application of CGE models to inflation, keynesian imbalances between aggregate supply and demand, and short-run stabilization policy. 61

From the first period, most well known CGE model that includes money and assets is the model of Turkey by Lewis 62. Another relatively dated study is the model by Ahluwahlia

Derviş et al., (1982), p. 152. Derviş et al., op. cit., p. 151. 62 Lewis, J. D., (1985), Financial Liberalization and Price Rigidities in a General Equilibrium Model with Financial Markets, Development Discussion Paper 211, Harvard Institute for International Development, Harvard University. 60 61

24

and Lysy63. The second period, on the other hand, harbours many more monetary models that incorporate assets. Among the studies surveyed for the second period, there are some models that directly analyze financial markets. For instances of such models, studies by Adelman and Yeldan which had been cited above, the model by Thissen and Lensinsk 64, the model by Yeldan 65 and many other models can be visited. Additionally, in the second period, there are some models that aim to analyze different subjects but also include assets. For instances of this practice, models by Fuji and Roland-Holst 66 and Cororaton 67 can be viewed.

Observing the difference between frequencies of models that include money, it can easily be concluded that, money has become a more frequently modelled phenomenon in the second period. Other concepts that have been modelled in the latter period are environment and energy. A number of models about environment, energy or both are listed in the appendix.

4.

Policy Issues Analyzed

Shifts in the concerns of economists, inevitably cause changes in the focus of modelling efforts. In the previous section, it was mentioned that, monetary and environmental subjects 63

Ahluwahlia, M., Lysy, F., (1979), Welfare Effects of Demand Management Policies: Impact Multipliers Under Alternative Model Structures, Journal of Policy Modelling, vol. 1, no. 3, pp. 317-343. 64 Thissen, M., Lensink, R., (2001), Macroeconomic Effects of a Currency Devaluation in Egypt, An Analysis with a Computable General Equilibrium Model with Financial Markets and Forward-looking expectations, Journal of Policy Modelling, vol. 23, pp. 411-419. 65 Yeldan, E., (1997), Financial Liberalization and Fiscal Repression in Turkey: Policy Analysis in a CGE Model With Financial Markets, Journal of Policy Modelling vol. 19, no. 1, pp. 79-117. 66 Fujii, T., Roland-Holst, D., (2008), How Does Vietnam’s Accession to the World Trade Organization Change the Spatial Incidence of Poverty?, The World Bank Development Research Group, Policy Research Working Paper No. 4521. 67 Cororaton, C. B., (1997), Economy-Wide Model of the Philippine Economy: Preliminary Version, Philippine Institute for Development Studies Discussion Paper Series No. 97-07.

25

are relatively new concepts that find themselves space in CGE models. Consequently, as of 1990’s, while environmental issues are perfectly novel to the world of CGE modelling, monetary models form the continuation of a few pioneering models that had been built in the first period. The reason for environment and money being analyzed in the previous section is that, they are economic phenomena that have been put into CGE models in a relatively recent period. This section, on the other hand, seeks for some concerns of modellers which had been analyzed with a different frequency or method than that in the second period.

As can be inferred from the surveys of models in the former period, issues related with international trade constitute the major field of interest for model builders. The same is perfectly true also for the latter period. Virtually half of the models in both periods are related with trade. However, efforts on modelling regional or global integration has been much more intense in the period after 1990. A surprisingly high number of models surveyed for the second period are built in order to analyze the effects of China’s accession to WTO. Compared to the models surveyed by Bandara, frequency of models on integration has more than doubled. For instances of such models from the latter period, the studies by Feltenstein and Plasman, 68 Gan 69 and Lee et al 70 can be visited.

Income distribution has become another prominent field of interest in the second period. Distributional issues had also been analyzed in the former period, but in the latter period, the emphasis on income distribution has been much stronger. Emergence of microsimulation-CGE models is another fact that confirms this tendency. Modellers have 68

Feltenstein, A., Plassmann, F., (2008), The Welfare Analysis of a Free Trade Zone: Intermediate Goods and the Asian Tigers, The World Economy, pp. 905-924. 69 Gan, J., (2004), Effects of China’s WTO Accession on Global Forest Product Trade, Forest Policy and Economics. Vol. 6, pp. 509-519. 70 Lee, H., Roland-Holst, D., van der Mensbrugghe, D., (2004), China’s Emergence in East Asia Under Alternative Trading Arrangements, Journal of Asian Economics. vol. 15, pp. 697-712.

26

tried to extend their insights beyond distribution of income among major household groups and capture distributional dynamics at a much more disaggregated level. Unlike the former, in the latter period income distribution is also observed to be analysed in conjunction with different policy issues. Models on regional integration, trade, development policies, agriculture and even on environmental issues are related to distributional consequences of policies. For an environmental model that analyzes the effects of various environment policies on household income, the model by Resosudarmo 71 can be viewed.

Most interesting strand of CGE models from the latter period are those, which analyze very specific and unconventional subjects. Such models are not observed in the former period. For instance, the model by Pambudi et al, 72 analyzes the effects of bombing incidence in Bali island of Indonesia, in the year 2005. Another model by Strzepek et al 73 tries to analyze the situation of Egyptian economy if High Aswan dam were not built. Another example of models that trace the effects on the economy of a specific project is the one by Liu 74 which analyzes the effects of Tainan Science-based industrial park on the Taiwanese economy. Other examples of such models are listed in the appendix.

Conclusion In the comparison made between the CGE models of developing countries, before and after 1990, some differences are observed in terms of theoretical paradigm, model structures, economic phenomena being modelled and policy concerns. The models in both periods 71

Resosudarmo, B. P., (2003), Computable General Equilibrium Model On Air Pollution Abatement Policies With Indonesia As A Case Study, The Economic Record, vol. 79, Special Issue, June 2003, pp. 6373. 72 Pambudi, D., McCaughey, N., Smyth, R., (2008), Computable General Equilibrium Estimates of the Impact of the Bali Bombing on the Indonesian Economy, ABERU Discussion Paper 53. 73 Strzepek, K. M., Yohe, W., Tol, R. S. J., Rosegrant, M. V., (2008), The Value of the High Aswan Dam for the Egyptian Economy, Ecological Economics. vol. 66, pp. 117-126. 74 Liu, C.C., (2006), A Computable General Equilibrium Model of the Southern Region of Taiwan: The Impact of the Tainan Science-based Industrial Park, Applied Economics, vol. 38, pp. 1655-1661.

27

have incorporated a variety of structural features which are assumed to be more characteristic of developing countries. However, incorporation of structural features does not mean a complete departure from walrasian paradigm that underlies CGE modelling. Besides, some models especially in the second period have major differences in terms of underlying theory and notion of general equilibrium. Macro structural models form the group which has the most notable differences compared to neoclassical walrasian models.

In terms of model structures, treatment of dynamic factors constitutes a point of distinction. In the models of the first period, factors related with time are handled with recursivedynamic models more frequently. Though there are instances of both types of dynamic models, intertemporal dynamic models are relatively more frequent in the second period. Microsimulation CGE models also constitute a novel field of modelling efforts. Increasing emphasis on distributional issues have led the model builders to seek for more precise analysis in terms of income distribution and policy incidences. Unlike conventional CGE models with representative agents, microsimulation CGE models analyze distribution of income between households within the same group.

CGE models have utilized a variety of functional forms in both periods and it is difficult to define a distinction between the production and utility functions used in the first and second period. However, it can be concluded that variety in demand formulations is higher than that in production. Disaggregation level is also similar in both periods, with the models of the second period being slightly more disaggregated on the average. Another novel approach, observed in the second period is disaggregating the economy on a regional basis. Many of the models surveyed for the second period are regionally and sectorally disaggregated at the same time.

28

There also exist differences in terms of economic phenomena analyzed in CGE models of first and second periods. Money and assets had started to be analyzed in CGE models of the first period. However, in this period, models with money and assets are very few and inclusion of money in CGE models is a rare approach. In the second period, number of monetary models has significantly increased. Besides building models for analyzing monetary policy or financial markets, modellers have also tended to include these concepts into models, that actually analyze issues not directly related with money or assets.

Another phenomenon analyzed in the models of second period is environment. This concept is totally novel for the second period. There are many models that analyze consequences of environment policies on the economy, environment and even income distribution.

There are also differences in policy issues analyzed in CGE models. Number of models on policy issues related with global and regional integration issues have dramatically increased. Another policy issue intensely analyzed in the latter period is income distribution. This concept has also been incorporated into models about international trade, development policies, energy, agriculture and financial markets. CGE models about very specific or local issues are also novelties of the latter period.

29

Appendix: Selected CGE models of developing countries for the period after 1990. Study No:

Author(s)/ Year of Publication

Country

Supply Side Production Function

Demand Side

Base Year

Main Database and Values of Key Parameters

Policy Simulations

Number of Sectors

Demand Functions

Number of Sectors

12

Demand functions derived from CobbDouglas utility functions Nested CES

12

1994

SAM

Reduction in tariffs

1

1989

Other studies

Demand functions derived from CobbDouglas utility functions Fixed coefficient 10 regions Leontief Leontief/CES 11 sectors

7

1991

SAM

1

1997

GTAP database

4

1990

SAM, Foreign trade statistics

Analysis of trade diverting policies such as quota, tariff and subsidization Liberalization of foreign trade, under fixed and variable foreign savings assumptions Effects of scenarios i) 25%, 50%, 75% and 100% reduction in tariffs of imported inputs, ii) 25%, 50%, 75% and 100% reduction in VAT on exports and domestic sales Effects of the scenarios, i) A certain rate of reduction in all tariffs, ii) Abolishment of taxes on imported inputs while preserving tariffs on imports of consumer goods, on production, incomes and public finance

A. Studies About Foreign Trade Policies 1. General foreign trade policies 1

C. B. Cororaton/ 2003

2

G. W. Turkey Harrison et al/ 1992 A. Cattaneo et Costa al/ 1999 Rica

3

Philippines CES

4

C.-C. Ciu et al/ China 2006

5

R. Mabugu/ 2001

Zimbabwe

Leontief-CES

40

Cobb-Douglas

25

Fixed coefficientNested CES

4

LES

30

Study No:


Country


6

G. Philippidis, A. I. Sanjuan/ 2006

Morocco

Not defined

7

J. M. Arunanondchai/ 2003

Malaysia, Indonesia

CES/Nested CES

8

M. A. Chemingui, S. Dessus/ 2008

Syria

9

J. Zhang, J. Gan/ 2007

China

Nested CES, Fixed coefficient Nested CES

10

R. Davies et al/ 1998

Zimbabwe

Nested CES, Leontief

11

R. Mabugu, M. Chitiga/ 2008

South Africa

CES, Leontief

Demand Side

Number of Sectors 22

Demand Functions Not defined

5 regions, Demand 4 sectors functions derived from CobbDouglas utility functions 23 CES

11 regions 11 sectors 5

27

Demand functions derived from CDE utility functions Not defined

Not defined

31

Number of Sectors 3

Base Year


2001, GTAP databases 2015

1

1996

Input-Output tables, Foreign trade statistics, National accounts

1

2002

SAM

Not defined

2001

GTAP database

1

1985

SAM

4

2000

SAM, Household survey

Policy Simulations

Simulation of alternative scenarios (removal of tariffs on agricultural products etc.) about trade between Morocco and EU, effects of NTB’s on trade and growth Analysis of various scenarios about full liberalization and implementation of Uruguay Round rates in forestry products trade Effects of quotas and NTB’s on foreign trade and welfare Effects of China’s increasing demand for forestry products on exporting countries and world economy Effects on the economy of various policies implemented for liberalization of foreign trade Analyzing the effects on income and welfare of protection for domestic agricultural goods against foreign goods

Study No:


Country


12

L. Söderling/ 2005

Gabon

CobbDouglas

13

B. Lucke et al/ 2007

Lebanon

Fixed coefficient Leontief

Demand Side

Number of Sectors 2

3

2. Foreign trade studies about regional integration 14 A. Feltenstein, Asian CES 7 F. Plassmann/ Tigers 2008 15

S. Urata, K. Kiyota/ 2003

East Asia

16

D. Hartono et al/ 2007

Indonesia CES

Nested CES

21

20

Demand Functions

CES

Number of Sectors 1

Base Year


Policy Simulations

2000

Various statistics

Various simulations depicting the vulnerability of Gabonese economy against changes in availability of foreign financing possibilities and oil prices Effects of political stability and liberalization of foreign trade on the economy

Demand functions derived from instantaneous utility functions

1

1997

SAM

Nested CES and Cobb-Douglas

1

2000

Demand functions derived from CobbDouglas utility functions LES

1

1997

Asia international i) Removal of all tariffs among input-output table member countries of FTA ii) Admission of China and Korea to the FTA membership GTAP database Effects of establishing an East Asian FTA on trades of countries in the region

20

2001

32

SAM, InputPossible effects of various output table, alternative FTA’s to which national accounts Indonesia may access

Study No:


Country


Demand Side

Number Demand of Functions Sectors 10 Cobbregions Douglas 7 sectors

Base Year


-

1995

11 regions, representat ive household

1996

GTAP database Effects of China’s accession to WTO on global trade of forestry products, in cases of i) Unilateral liberalization of foreign trade as a consequence of WTO membership, ii) WTO membership + Uruguay Round GTAP database Effects of different foreign trade policies (FTA, customs union, various rates of tariff reductions with MERCOSUR or NAFTA) under various elasticities of foreign demand

Number of Sectors

17

J. Gan/ 2004

18

G. W. Harrison Chile et al/ 2002

Leontief-CES

11 regions 24 sectors

CES

19

H. Zhang/ 2004

China

Two stage nested Leontief/CES

CES/StoneGeary

1

1998

20

A. Haddad et al/ 2002

Brazil

Not defined

2 regions 30 sectors 27 regions 42 sectors

Not defined

1

21

S. McDonald India, et al/ 2007 China, East Asian countries

CES and Leontief

StoneGeary

22

X. Diao/ 2003

Not defined

China

China

CES

23

7 regions Not defined 28 sectors

33

Policy Simulations

Effects of liberalizing foreign trade, following WTO membership

1997

Input-output tables, Macroeconomic data Other studies, International and interregional trade data

1

2001

SAM

Effects of various regional trade agreements on countries of the region

2

1999/ 2000

1997 SAM, 2001 GTAP database

National and regional effects of China’s accession to WTO, on agricultural and some non-agricultural sectors

Effects of the scenarios, i) Accession to FTAA ii) FTA agreement with MERCOSUR and EU iii) Bilateral trade agreements with all trade partners of Brazil on GDP, GDP deflator, employment, real wages and foreign trade

Study No:


Country

Supply Side

Demand Side

23

Z. Wang/ 2003

China

Production Function Not defined

24

N. Hosoe/ 2006

Jordan

Not defined

25

W. L. Maldonado et al/ 2007 Z. Wang, E. G. Schuh/ 2002

Brazil

CES

China

CES

16 regions ELES 21 sectors 3 countries Cobb26 sectors Douglas

26

27

M. E. Mexico, Burfisher et al/ USA, 2002 Canada

CES

28

R. Robertson/ 2005

Mexico

Specific (dynamic)

29

G. W. Harrison et al/ 2004

Brazil

Not defined

Number Demand of Sectors Functions 17 regions ELES 25 sectors

3 regions 9 sectors

42

4 regions

22

Number of Sectors Not defined

Base Year 2000


GTAP database, Various Analysis of effects of statistics China’s accession to WTO, on China and other countries Input-output table, GTAP Effects of the scenarios, i) Uruguay Round database ii) FTA agreement with EU on production and foreign trade SAM, Input-output table Effects of trade agreements with EU and ALCA

Not defined

1

1992

LES

1

1998

3

1997

GTAP database

3 countries 1 representative household

1993

Input-output tables of countries, Macroeconomic data, Foreign trade statistics

Specific (dynamic)

-

CES

20

34

Policy Simulations

Consequences of economic integration between China and East Asian countries

Effects of NAFTA on Mexican economy, under scenarios i) Distortionary policies prevail ii) These policies are eliminated Not National Urban Simulations for determining defined Employment Survey, the degree of integration Various statistics between the labour markets of Mexico and US 2002 GTAP database, Survey Effects of various foreign of life standards, Various trade policies on the statistics incomes of poor households

Study No:


Country


30

S. Storm/ 2001

India

Not defined (supply is determined according to demand)

31

E. Ianchovichinia, W. Martin/ 2004

China

Not defined

32

H. Lee et al/2004

China, East Asian countries

Nested CES

33

J. F. Francois, D. Spinanger/ 2004

China

34

M. S. S. Perera/ 2008

Sri-Lanka

Demand Side

Number of Sectors 2 regions 9 sectors

Not defined

Demand Functions LES

CDE

Number of Sectors 7

Base Year


1985– SAM 1986

Not defined

-

GTAP database, Various statistics

9 regions ELES 18 sectors

1

1997

GTAP database

Leontief-CES

25 regions 23 sectors

-

1997

GTAP database, National accounts

Leontief, CES

15 regions CES 27 sectors

15

2001

GTAP database

35

Policy Simulations

Effects on income distribution of realizing tight and strategic integration alternatives in short or long periods Effects of WTO membership on China and her trading partners Various foreign trade and integration policies of China, on China, Japan, US and countries of the region Effects of WTO membership on Chinese motor vehicle industry Analyzing the effects of i) Complete liberalization of trade between Sri-Lanka and India ii) Establishment of a FTA between Sri-Lanka and India on welfare, income, foreign trade and wages

Study No:


Country

Supply Side

35

G. W. Harrison et al/ 1997

Turkey

36

T. D. Nguyen, M. Ezaki/ 2005

Vietnam CES

Production Function Not defined

Number of Sectors Not defined

Demand Side Demand Functions

Not defined

11 regions Demand functions 10 sectors derived from CobbDouglas utility functions

36

Number of Sectors 1

20

Base Year


Policy Simulations

1993

Other studies

Effects of the scenarios about EU Customs Union and Turkey that, i) Raising product standards to those of EU, ii) Reduction of tariffs on nonagricultural goods, iii) Increase in accession possibilities to third markets due to CU iv) Abolishment of export subsidies v) Decrease in costs of trade between EU and Turkey vi) Instantaneous occurrence of all scenarios mentioned

2001

GTAP database

i) Removal of tariffs on bilateral trade between Vietnam and ASEAN-4 ii) Removal of tariffs on bilateral trade of Vietnam with China and ASEAN-4 iii) Removal of tariffs on bilateral trade of Vietnam with China, ASEAN-4 and East Asian NIC’s iv) Removal of tariffs on bilateral trade of Vietnam with China, ASEAN-4, East Asian NIC’s, Japan and North America v) Multilateral trade liberalization

Study No:


Country


Number of Sectors


Number of Sectors

Base Year


Policy Simulations

3. Integration and income distribution 37 Y. Mai/ 2008 China Fixed coefficient

57

Not defined

1

1997

GTAP database

Effects on rural income of removing tariffs from wheat and rice

38

W. Naude, R. Rossouw/ 2008

South Africa

Not defined

32

Not defined

6 household categories, 4 ethnic groups

2002

SAM, Econometric estimates

39

Y. Shujie, L. Aying/ 1996

Ethiopia

Not defined

2 regions CES 9 sectors

4

1987

SAM

Macroeconomic and distributional effects of a quota imposed by South Africa on imports of textile and clothing from China under various assumptions Effects on food security and income distribution of trade reform and policies aimed at dampening the negative effects of liberalization

40

A. Gelan/ 2002

Ethiopia

Nested CES


2 (one category in each region)

1996

SAM

41

N. Herault/ 2006

South Africa

Not defined

4

2000

SAM, Econometric estimates

43

Demand functions derived from econometrically estimated income and utility functions

37

i) 50% nominal devaluation of local currency ii) 50% reduction in import and export taxes iii) Fixing urban real wages iv) Increasing nominal wages in urban regions through changes in minimum wage Effects of liberalization of foreign trade on income distribution among various household groups and races

Study No:


Country

42

A. Suryahadi/ 2001

Indonesia

Leontief, CES

43

T. F. Rutherford, D. G. Tarr/ 2008

Russia

Not defined

44

P. Warr/ 2005

Indonesia

45

T. Fujii, D. Roland-Holst/ 2008 B. Decaluwé et al/ 2005

Vietnam

S. Chen, M. Ravallion/ 2004

46

47


Demand Side

Number of Sectors 4

Demand Functions

Number of Sectors

Base Year

Main Database and Values of Key Parameters GTAP database

CobbDouglas, CDE

5

1992

35

CobbDouglas

55,098 (microsimulation)

-

Not defined

65

LES

10

1999

Not defined

97

Not defined

5

2000

Cameroon CES

6

LES

4

1995– Household surveys 1996

China

25

Not defined

2

1999

Not defined

38

Input-output table, Household budget survey, GTAP Database SAM, Input-output table

SAM, National accounts

Urban and rural household surveys

Policy Simulations

Effects of the scenarios, i) Liberalization of trade ii) Increase in capital stock iii) Biased and unbiased technological change on the incomes of the sector, region and the households Effects of Russia’s accession to WTO on income distribution Effects on income distribution of imposing a 90% quota and 25% tariff on imports of rice Effects of accession to WTO on poverty and income distribution i) 30% fall in the price of the exportable good produced by the country ii) 50% reduction in tariffs Effects of changes in factor and goods prices caused by accession to WTO, on regional welfare

Study No:


Country


48


Philippines

CES

49

R. A. De Santis/ 2003

Turkey


Demand Side


20

B. Studies About Growth, Development and Income Distribution 50 E. Kim, South Korea Cobb-Douglas, 14 S. Kim/ 2002 Fixed regions coefficient Leontief 51

52

53

T. Abdelkhalek, Morocco J.-M. Dufour/ 1998 S. Robinson et Indonesia al/ 1998 H. T. Jensen, H. Tarp/ 2004

Demand Functions Demand functions derived from CobbDouglas utility functions Demand functions derived from CobbDouglas utility functions

Number of Sectors 1

Base Main Database and Year Values of Key Parameters 1994

SAM

Effects of various rates of reduction in tariffs, on households

1

1990

Input-output table

Effects of customs union on welfare, production, migration, labour force, capital and volume of trade, under the scenarios, i) Harris-Todaro ii) Wage curve

10

1995

SAM

Effects of regional development plans on various regions of the economy

-

1985

SAM, Other studies

25% increase in the inflow of workers’ remittances Positive and negative shocks in the efficiency of rice production Effects of various development strategies such as i) Agriculture oriented ii) Export oriented iii) Agriculture based industrialization

CES

2

Demand functions derived from CobbDouglas utility functions Not defined

CES

21

Not defined

8

1990

SAM

LES

12

1997

SAM, Macroeconomic data, Household surveys

Mozambique CES/CobbDouglas

39

Policy Simulations

Study No:


Country



54

W. Naude, R. Coetze/ 2004

South Africa

CES


55

C. Nguyen et al/ 2005

Vietnam

CES

2

CES

10

1997

56

A. Feltenstein, S. Sarangi/ 2002

Tanzania

Not defined

27

Demand functions derived from CobbDouglas utility functions

2

1993

Not defined

40

Number of Sectors 4

Base Year

1995

Main Database and Values of Key Parameters SAM

Policy Simulations

Effects of labour augmenting technological progress on labour market and growth, under the scenarios, i) Fixed average nominal wage ii) Fixed average real wage iii) Fixed level of employment, flexible real and nominal wage iv) Fixed level of employment and average real wage Data obtained from Analysis of scenarios, i) Fully mobile labour force other studies across sectors ii) Separated labour markets according to markets iii) Separated labour markets and 10% adjustment costs in sectors iv) Full but costly labour mobility v) Labour market with unemployment with various models Input-output table of Dynamic effects of scenarios, i) Increase in share of public another country investment expenditures in (Uganda), GDP by 3% Econometrically estimated parameters ii) Technological progress in electricity, water and communications sectors that saves 20% value added

Study No:


Country

Supply Side

57

S. Yao, A. Liu/ 2000

Philippines

Specific

58

H-S. Jung, E. Thorbecke/ 2003

Tanzania, Zambia

CobbDouglas, CES

3

Not defined

4

59

S. Levy/ 2007

Chad

CES

6

Not defined

2

Production Function

Demand Side

Number of Sectors 3

Demand Functions Specific

Number of Sectors 9

41

Base Year

1987


Policy Simulations

SAM, Various Effects of nine different statistics, scenarios about supply, Macroeconomic data demand and foreign exchange policies on prices, income and distribution 1992 SAM’s from other Effects of a 15% increase in (Tanzania) studies, Household real public expenditures of 1995 surveys education under the scenarios, i) 2.5% increase in population (Zambia) and labour supply ii) Further increase in labour supply, caused by the rise in unskilled labour wage iii) Increasing skilled labour endowment of the poor by realizing the expenditure increases in favour of this group on growth, wages and income distribution 1996 SAM, Informal sector Income and welfare effects of survey by UNDP the following scenarios, on the economy of Chad, under various assumptions about parameters: i) Development of transportation network ii) Increase in irrigation possibilities

Study No:


Country

Supply Side

60

R. M. Bautista, M. Thomas/ 2000

Zimbabwe Nested CES, Leontief

61

M. Noland et al/1996

North Korea

Cobb-Douglas, Fixed coefficient Leontief

8

Not defined

62

A. J. Field, U. Wongwatanasin/ 2007

Thailand

Cobb-Douglas, CES

20

63

E. Yeldan/ 1997

Turkey

CES

4

Production Function

Demand Side



Number of Sectors 2

Base Main Year Database and Values of Key Parameters 1991

SAM

1

1990

SAM

Not defined

10

1985

SAM


4

1987

Not defined

42

Policy Simulations

12 simulations, by which, scenarios of liberalization of trade, price controls, income tax adjustments and various land reforms are analyzed i) Abolishment of taxes on imports and exports ii) Increase in total factor productivity iii) Decrease in value of capital stock and various combinations of these scenarios Effects of the policies, i) Simulation of industry policies implemented between the years 1981-1985 (protection by tariffs, export subsidies and credits, investment finance supports) ii) Effects of export subsidies and investment incentives on individual sectors and overall economy i) Real effects of financing budget deficit by borrowing or monetization ii) Effects on financial markets of deregulation of conditions for the public sector issues of borrowing instruments iii) Effects of perpetual foreign debt service and devaluation policy on real and financial markets

Study No:


Country


64

B. Gibson, D. E. Van Seventer/ 2000

South Africa

Specific

65

P. Dorosh, S. Haggblade/ 2003

Sub-Saharan African countries

Fixed coefficient/CES

66

M. Chitiga/ 2000

Zimbabwe

Leontief-CES

67

S. Devarajan Bangladesh, et al/ 1997 Indonesia

CES, CobbDouglas

Demand Side

Number of Sectors 8

Different for each country

5

Base Year

Demand Functions

Number of Sectors

LES

3 labour categories, 3 income groups, 4 races

1992

Not defined

Different according to countries

Different according to countries

2

-

3

-

LES

35 Cobb(Bangladesh), Douglas 30 (Indonesia)

43

Main Policy Simulations Database and Values of Key Parameters SAM Effects of a 15% increase in overall nominal wages and unskilled labour wages, on investment, growth, capital accumulation and employment, under various assumptions about interest, foreign exchange and borrowing policies SAM’s of Analyzing the effects of public countries from investment expenditures in different years various sectors, on level and distribution of income, considering the interactions among countries Input-output Simulations for increasing the table, National income of the poorest group accounts, by 5% through transfer Various payments i) By taking no balancing statistics measures for the budget, ii) By decreasing other government expenditures, iii) By increasing direct and indirect taxes Various statistics

Income and welfare effects of a 30% reduction in tariffs, depending on power, organization and stance (active-passive) of trade unions

Study No:


Country


Number of Sectors


21

68

J. Lay et al/ 2008

Bolivia

69

R. Mahjabeen/ 2008

Bangladesh CobbDouglasLeontief

70

S. McDonald et al/ 2006

South Africa

Nested CES

71

A. Vattanakuljarus, I. Coxhead/ 2008 A. Blake et al/ 2007

Thailand

Brazil

72

Demand Side

3, (in expanded model 4)


Number of Sectors 1

Base Year


2001

SAM

4

1999– SAM 2000

17

Demand functions derived from Cobb-Douglas utility functions Stone-Geary

4

2000

SAM

Nested CES

4

Klein-Rubin, LES

4

2004

SAM

CES

54

CES

5

73

J. Zhuang/ 1996 China

CobbDouglas

17

LES

2

1983

74

M. Chitiga, R. Mabugu/ 2008

Leontief-CES

16

Stone-Geary

5

1995

Zimbabwe

44

Policy Simulations

Effects of a positive shock related with natural resources (natural gas, petroleum) of the country, on income distribution and labour market Analysis of effects of microfinance institutions on income distribution, welfare and employment Effects of a 3% increase in taxes of oil, on income distribution among regions and households under various closure rules Effects of the growth in tourism sector on income distribution among household groups

SAM

Effects of a 10% growth in tourism sector, on households from various income groups

SAM, Econometric estimates Former studies of the author

Welfare and distribution effects of transition to free market Possible effects of alternative scenarios about land reform, on income distribution, poverty and production

Study No:


Country


75

H. Löfgren, M. El-Said/ 2001

Egypt

76

O. Chisari et al/ 1999

Argentina Fixed coefficient/ Cobb-Douglas


Demand Side


21

C. Studies about energy, environment and agriculture 77 J. H. Van South CES 39 Heerden et al/ Africa 2008

Base Year


11

1996

SAM, Parameters Consequences of policies obtained from about, a) For various types of food other studies i) Conduction of food aid, considering the needs of household groups ii) Abolishment of food aids b) Subsidizing wheat flour mixed with 20% corn, instead of pure wheat flour

5 domestic and 1 foreign consumer groups

1993

Data from different years

Income distribution effects of, i) Endogenous ii) Constant determination of privatized electricity, water, gas and telecommunications prices

Not defined

-

1998

SAM

Effects on the economy of two different taxes levied on water, used in production Economic impacts of the intended policy scenarios of compliance with the Kyoto Protocol Effects on the economy of taxation alternatives about pollution and emission

Demand Functions Nested AIDS and LES

Not defined, CobbDouglas (for foreign consumers)

Number of Sectors

78

Ç. Telli et al/ 2008

Turkey

CobbDouglas, CES

10

Not defined

1

2003

Various statistics

79

J. Xie, S. Saltzman/ 2000

China

Cobb-Douglas

10


1

1990

SAM

45

Policy Simulations

Study No:


Country


80

G. S. Turkey Kumbaroğlu/ 2003

Nested CobbDouglas, CES

81

B. P. Indonesia Resosudarm o/ 2003

Nested CESLeontief

Demand Side

Number Demand of Functions Sectors 7 Not defined

18

LES

Number of Sectors 1

10

46

Base Year


Policy Simulations

1991

Various statistics on environment and economy

Effects of the scenarios, i) Imposition of 100 USD emission tax for a ton of SO2 emission ii) Imposition of 300 USD emission tax for a ton of SO2 emission iii) Imposition of 100 USD emission tax for a ton of NOx emission iv) Imposition of 300 USD emission tax for a ton of NOx emission v) Imposition of 500 USD tax for every ton of sulphur in fuels, on GDP, investment, imports and exports

1990

SAM

Effects of the scenarios, i) Implementation of no policies aimed at decreasing pollution ii) Increasing the supply of unleaded fuel and equalizing its price to that of leaded fuel iii) In addition to the policy about unleaded fuel, imposing the use of catalytic converters on new vehicles iv) imposing compliance of vehicles to determined levels of emission v) Decreasing the subsidization rates of gas and high speed diesel vi) Mixed policy, on household income and diseases caused by pollution

Study No:


Country


Demand Side


Demand Functions

Number of Sectors 5

Base Year


Policy Simulations

1995

Other studies (Original data: Input-output table, Macroeconomic data, Agriculture censuses)

Effects of the scenarios, i) Abolition of all supports on agriculture ii) Imposition of an homogenous tax on agricultural activities, on deforestation Consequences of the following scenarios on national income, income distribution and environment: i) Fertilizer subsidization ii) Food subsidization iii) Energy subsidization policies are applied and the public savings from their abolishment are injected back into the economy as additional investment Effects of the scenarios, i) Limitation of SO2 emissions ii) No limitations on SO2 emissions, on growth, consumption and environment Effects of the scenarios, i) Liberalization of foreign trade ii) Technical progress that leads to 10% efficiency increase in production of tea, on land degradation and its consequences on the economy

82

A. Cattaneo/ 2001

Brazil

Two stage CES

83

J. B. Nugent, C. V. S. K. Sarma/ 2002

India

Nested CES

15

Not defined

84

O. Kiulia/ 2003

Poland


17

Stone-Geary utility function and LES

2

1995

Input-output table, Various statistics

85

J. S. Bandara, I. Coxhead/ 1999

Sri Lanka

CES/Leontief

37

CES

1

1989

Input-output table

CobbDouglas

2 regions 1988/1989 SAM 4 sectors

47

Study No:


Country

Supply Side

86

J. E. Taylor et al/ 1999

Mexico

CobbDouglas

87

F. Doğruel et al

Turkey

CobbDouglas

6

Demand function derived from intertemporal optimization

1

1990

88

B. Bashaasha Uganda et al/ 2001

Nested CobbDouglas

6

Cobb-Douglas

3

1992

Production Function

Demand Side

Number of Sectors 5

Demand Functions

Not defined

48

Number of Sectors 3

Base Year


1989

Household surveys

Policy Simulations

Consequences of policies, i) Decreasing the subsidy for corn by 40% ii) Direct income support equal to the level of loss they are subject to, because of price falls in their primary crops iii) Use of funds to be given as direct income support, for purchasing households’ labour in the short run iv) Use of funds for increasing long run efficiency in agriculture by 10% Input-output table, Welfare effects of policies, i) Total abolishment of Other studies agricultural supports ii) Direct income support equal to the support that had been given in the form of price support iii) Decreasing direct income support to half the amount that had been given in the form of price support SAM, Input-output Effects of the scenarios, i) 3% and 30% increases in table, National accounts, Household productivity ii) Imposition of tax on inputs for surveys production of fuelwood, on income and use of land

Study No:


Country

Supply Side

89

E. A. Abdelgalil, S. I. Cohen/ 2001

Sudan

CobbDouglas

90

R. A. McDougall/ 1993

Australia

Nested CESLeontief

Not defined

91

A. Galinis, M. J. Van Leeuwen/ 2000

Lithuania


15

Production Function

Demand Side

Number of Sectors

3

Demand Functions

Not defined

Numb er of Sector s 3

Base Main Database and Year Values of Key Parameters

Policy Simulations

1990 SAM

Consequences of the scenarios, i) Decreasing the tax burden on prices of irrigated agriculture crops ii) Increasing the lease term in mechanised rain-fed agriculture iii) Making a transfer to poor subsistence farmers iv) Raising farmers’ knowledge in the three sectors

Linear

1

1986/ ORANI Database, 1987 SAM

Consequences of taxing use of various fuels and energy types, on carbon emissions and environment

LES

1

1994 Input-output table of 1994, produced for the study, National accounts, Various statistics

Consequences of policies, i) Continuation of the existing nuclear power reactor (INPP) according to predetermined policies ii) Decommissioning of one its units, on energy production, growth, carbon emissions and environment

49

Study No:


Country


D. Studies modelling an entire economy 92 J. Thurlow/ South CES 2004 Africa 93


Philippines Not defined

Demand Side

Number of Sectors

I. Adelman, E. Yeldan/ 2000

Asian countries

CobbDouglas/ Fixed coefficient

Number of Sectors

20

LES

14

34

Not defined

10

CES

1

E. Studies about monetary policy and financial markets 94 M. Thissen, Egypt Cobb3 R. Lensink/ Douglas, 2001 Linear production function 95

Demand Functions

3 Intertemporal regions, additive utility 4 sectors function

3 regions, representative household

50

Base Year


1993 and 2000 1987

SAM, Other studies

-

SAM

Consequences of 10 alternative policies (fixed exchange rates, cuts in government expenditures etc.) related to structural adjustments made between 1987 and 1993, on real GNP and prices

Not SAM'S of defined different years

Not Not defined defined

Policy Simulations

Short, medium and long term consequences of devaluation in local currency on current account and production, under various assumptions about expectations Regeneration of Asian crisis under the scenarios, i) Not liberalizing capital and goods markets ii) Full liberalization of capital and goods markets, ineffective state

Study No:


Country


F. Models for specific issues, regions or projects 96 M. Horridge, China Not defined G. Wittwer/ 2008

Demand Side

Number of Sectors

Demand Functions

10 regions, Not defined 63 sectors

Base Year


Not defined

2002

Sino TERM main database

Number of Sectors

Policy Simulations

Regional effects of the railway to be built between Chongqing and Lichuan cities Welfare and income effects of various scenarios about exports of plywood sector

97

F. Jakfar/ 2001

Indonesia Leontief-CES, Leontief-CobbDouglas

5

Specific

1

1990

SAM and Inputoutput table

98

C.C. Liu/ 2006

Taiwan

Two stage Cobb-DouglasLeontief

14

5

1999

SAM, Other studies, Various studies

Effects of Tainan ScienceBased Industrial Park on the economy

99

K. M. Strzepek Egypt et al/ 2008

Nested CES

4

Demand functions derived from CobbDouglas utility functions LES

1

1997

National accounts, Statistics of River Nile

100

D. Pambudi et al/ 2008

1

2000

Input-output table, Surveys

The situation of economy, under the assumption that Aswan Dam had not been built Effects of the bombing incidence in Bali island, on Indonesian economy

Indonesia Not defined


51

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