A CGE model consists of (a) equations describing model variables and (b) a database (usually very detailed) consistent with the model equations. The equations tend to be neo-classical in spirit, often assuming cost-minimizing behaviour by producers, average-cost pricing, and household demands based on optimizing behaviour. However, most CGE models conform only loosely to the theoretical general equilibrium paradigm. For example, they may allow for: non-market clearing, especially for labour (unemployment) or for commodities (inventories) Issue in US and EU and micro financing for countries with a single commodity isolation imperfect competition (e.g., monopoly pricing) Countries who Alpha export is a single commodity oriented and hedged by capital reserve demands not influenced by price (e.g., government demands) consumers in US and abroad a range of taxes: in china (corruption) US (trusts and movement of money overseas) externalities, such as pollution--issue in china why growth in EU manufacturing A CGE model database consists of: tables of transaction values, showing, for example, the value of coal used by the iron industry. Usually the database is presented as an input-output table or as a social accounting matrix. In either case, it covers the whole economy of a country (or even the whole world), and distinguishes a number of sectors, commodities, primary factors and perhaps types of household. elasticities: dimensionless parameters that capture behavioural response. For example, export demand elasticities specify by how much export volumes might fall if export prices went up. Other elasticities may belong to the Constant Elasticity of Substitution class. Amongst these are Armington elasticities, which show whether products of different countries are close substitutes, and elasticities measuring how easily inputs to production may be substituted for one another. Expenditure elasticities show how household demands respond to income changes. Why feb no taper from Fed because of debt issue in DC and no parameters in volume data from commodity..isolate March when data is noted and issue in DC should be done or still being prolonged. Issue of social accounting matrix Cough Cough what bill and michael talked about at devous and the TV show. #whyjanet #andtheIMFguy #humancapitaldevelopmenttheory101 Mrs Hays,Pimm, Tom and Bloomberg News Bloomberg Television Bloomberg Radio Bloomberg Markets
Posted on: Sun, 26 Jan 2014 22:49:56 +0000
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