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A Sub-national CGE Model for Italy

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  • Standardi, Gabriele
  • Bosello, Francesco
  • Eboli, Fabio

Abstract

This paper describes a methodology to develop a Computable General Equilibrium model with a sub-national detail starting from a global database and model presenting the country-level as the highest resolution. This procedure is demonstratively applied to Italy, but can be transferred to any country/macro-region, provided regional data availability. Increasing the spatial resolution of a CGE model can be particularly useful to capture local specificities not only in response to given policy shocks, but also to environmental impacts, as, for instance, those originated by climate change, which are highly differentiated spatially. Conceptual and practical issues are treated: we use an innovative method to estimate bilateral trade flows across sub-national areas and analyse the implications of different assumptions on both factor and good intra-country mobility. We carry out a simple experiment to test the robustness of our regionalized structure.

Suggested Citation

  • Standardi, Gabriele & Bosello, Francesco & Eboli, Fabio, 2014. "A Sub-national CGE Model for Italy," Climate Change and Sustainable Development 163596, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcl:163596
    DOI: 10.22004/ag.econ.163596
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    1. Antoine Bouët & Jean‐Christophe Bureau & Yvan Decreux & Sébastien Jean, 2005. "Multilateral Agricultural Trade Liberalisation: The Contrasting Fortunes of Developing Countries in the Doha Round," The World Economy, Wiley Blackwell, vol. 28(9), pages 1329-1354, September.
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    3. Andrea Bigano & Francesco Bosello & Roberto Roson & Richard Tol, 2008. "Economy-wide impacts of climate change: a joint analysis for sea level rise and tourism," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 13(8), pages 765-791, October.
    4. Böhringer, Christoph & Balistreri, Edward J. & Rutherford, Thomas F., 2012. "The role of border carbon adjustment in unilateral climate policy: Overview of an Energy Modeling Forum study (EMF 29)," Energy Economics, Elsevier, vol. 34(S2), pages 97-110.
    5. Francesco Bosello & Robert Nicholls & Julie Richards & Roberto Roson & Richard Tol, 2012. "Economic impacts of climate change in Europe: sea-level rise," Climatic Change, Springer, vol. 112(1), pages 63-81, May.
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    7. Chintrakarn, Pandej & Millimet, Daniel L., 2006. "The environmental consequences of trade: Evidence from subnational trade flows," Journal of Environmental Economics and Management, Elsevier, vol. 52(1), pages 430-453, July.
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    1. Standardi, Gabriele & Cai, Yiyong & Yeh, Sonia, 2017. "Sensitivity of modeling results to technological and regional details: The case of Italy's carbon mitigation policy," Energy Economics, Elsevier, vol. 63(C), pages 116-128.
    2. Alessio Baldassarre & Danilo Carullo & Paolo Di Caro & Elisa Fusco & Pasquale Giacobbe & Carlo Orecchia, 2023. "Bilateral Regional Trade Flows in Italy: an Origin-Destination-Commodity GWR-SAR approach," Working Papers wp2023-18, Ministry of Economy and Finance, Department of Finance.
    3. Ali Bayar & Barbara Bratta & Silvia Carta & Paolo Di Caro & Marco Manzo & Carlo Orecchia, 2021. "Assessing the effects of VAT policies with an integrated CGE-microsimulation approach: evidence on Italy," Working Papers wp2021-14, Ministry of Economy and Finance, Department of Finance.
    4. Perez Blanco, C.D., 2018. "Waters run deep: A coupled Revealed Preference and CGE model to assess the economy-wide impacts of agricultural water buyback," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277028, International Association of Agricultural Economists.
    5. Pothen, Frank & Hübler, Michael, 2017. "A Regional Trade Model with Ricardian Productivity Gains and Multi-technology Electricity Supply," Hannover Economic Papers (HEP) dp-585, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.

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    More about this item

    Keywords

    Environmental Economics and Policy;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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