Book contents
- Frontmatter
- Contents
- Text Boxes
- About This Book
- Acknowledgments
- 1 Introduction to Computable General Equilibrium Models
- 2 Elements of a Computable General Equilibrium Model
- 3 The CGE Model Database: A Social Accounting Matrix
- 4 Final Demand in a CGE Model
- 5 Supply in a CGE Model
- 6 Factors of Production in a CGE Model
- 7 Trade in a CGE Model
- 8 Taxes in a CGE Model
- 9 Conclusion: Frontiers in CGE Modeling
- Model Exercises
- Appendix
- Glossary
- Practice and Review Answer Key
- Model Exercise Answer Key
- References
- Author Index
- Subject Index
1 - Introduction to Computable General Equilibrium Models
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- Text Boxes
- About This Book
- Acknowledgments
- 1 Introduction to Computable General Equilibrium Models
- 2 Elements of a Computable General Equilibrium Model
- 3 The CGE Model Database: A Social Accounting Matrix
- 4 Final Demand in a CGE Model
- 5 Supply in a CGE Model
- 6 Factors of Production in a CGE Model
- 7 Trade in a CGE Model
- 8 Taxes in a CGE Model
- 9 Conclusion: Frontiers in CGE Modeling
- Model Exercises
- Appendix
- Glossary
- Practice and Review Answer Key
- Model Exercise Answer Key
- References
- Author Index
- Subject Index
Summary
This chapter introduces students to computable general equilibrium (CGE) models, a class of economic model that describes an economy as a whole and the interactions among its parts. The basic structure of a CGE model and its database are described. We introduce a “standard” CGE model and provide a survey of CGE model applications.
Economic Models, Economists' Toys
When an economist wants to study the economic behavior observed in the complex world around us, the first step is often to build an economic model. A model can focus an analysis by stripping down and simplifying real world events into a representation of the motivations of the key players in any economic story. Some amount of context and interesting detail must be left out as the economist distills a model rich enough to explain events credibly and realistically, but simple enough to put the spotlight on the essential actions in the story. When an economist succeeds in building a model, he or she now has a tool that can be manipulated. By playing with this “toy” representation of economic activity, the economist can learn more about the fundamentals behind an event and can study likely outcomes or possible solutions.
There are many kinds of economic models. The type of model that we will be studying is a Computable General Equilibrium (CGE) model. It is an “economywide” model because it describes the motivations and behavior of all producers and consumers in an economy and the linkages among them.
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- Information
- Publisher: Cambridge University PressPrint publication year: 2011
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