Computable Equilibrium Modelling and Application to Economies in Transition

Erno Zalai

No 9804, CERT Discussion Papers from Centre for Economic Reform and Transformation, Heriot Watt University

Abstract: This paper examines the development and implementation of computable general equilibrium (CGE) models and examines their application to economies undergoing transition. The generalised development of a CGE model is presented in terms of the series of 'building blocks' which comprise a typical CGE system, whilst the flexibility of the CGE approach is illustrated by comparison of two specific CGE models: the GEM-E3 framework, developed by a team of researchers, led by Professor Pantelis Capros, based at the National Technical University of Athens, and the Hungarian Multisectoral (HUMUS) model framework, developed by a team, led by the author, from the Budapest University of Economic Sciences. The paper then examines the issue of closure rules in CGE models, and details the manner in which closure rules may be chosen to reflect specific features of the economy under study, particularly when applying CGE analysis to economies under transition. Finally the paper analyses the implementation and simulation of CGE models, including the steps necessary to construct benchmark datasets, calibrate the models, and to estimate counterfactual solutions.

Keywords: computable general equilibrium; closure rules; GEM-E3; HUMUS. (search for similar items in EconPapers)
JEL-codes: C68 D5 D58 (search for similar items in EconPapers)
Date: 1998
New Economics Papers: this item is included in nep-cmp, nep-eec and nep-mic
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Citations: View citations in EconPapers (3)

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