Course description

This is a seminar-type class, based on computer exercises with a theory refresher. Students will gain insights into methods of policy analysis that are frequently used in current research. The aim of the course is to learn to build general equilibrium models and to apply them to policy analysis.

Time and place

16:45 – 18:20, Wednesday, Computer Room J

Office hours: Thursday 11:30-12:30

Tentative schedule and materials

  1. Introduction to GAMS IDE Example: transport problem. Taken from GAMS Tutorial.
  2. Introduction:
    1. what is CGE?
    2. A simple model with pure exchange . Cobb-Douglas utility function must-read material.
    3. Calibration
    4. Pure exchange model equations step-by-step.
    5. The rewritten model in vector form to be completed in class.
  3. A model with Cobb-Douglas producer and Cobb-Douglas consumer.
    1. Presentation
    2. Working version of the model (NEW!)
  4. Extensions of the model:
    1. The underlying databases
    2. Short presentation to start with
    3. The model to start with
  5. More flexible functional forms: constant-elasticity of substitution
    1. Reading material (probably for next class) Updated 19-04-2010
    2. The model calibrated for use with CES and to be completed in class
    3. Exercises for class
  6. Other functional forms: Leontief. Value-added and intermediate goods.
    1. Some notes
    2. The model to complete in class
  7. Introduction to the GTAP model
    1. Linearization of CGE models
    2. Structure of GTAP
  8. Using the GTAP model
    1. I prepared a stripped down version of the model for you to use in class/at home (57 megs). Unzip to the directory of your choice. Run with rungtap.exe.
    2. If you want full demo version with many examples, go to https://www.gtap.agecon.purdue.edu/products/RunGTAP/ and register (for free). Or I can get it for you.
    3. Here are some things to do during class.
  9. Trade liberalization in the GTAP model
    1. List of things to do
  10. TBA

References

Varian, H., Intermediate Microeconomics: A Modern Approach, W.W. Norton, 2006

Francois, J, Reinert, K., Applied Methods for Trade Policy Analysis Handbook,Cambridge University Press, 1997 (especially for trade-related models)

Ginsburgh, V, Keyzer, M.,The Structure of Applied General Equilibrium Models, MIT Press 2002 (rather tough)


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