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General Equilibrium Modelling Applied to Romania (GEMAR): Focusing on the Agricultural and Food Sectors

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  • Scrieciu, Silviu Serban
  • Blake, Adam

Abstract

Applied general equilibrium modelling represents a powerful tool for assessing future likely economic changes due to upcoming or hypothesised policy shocks such as those brought about by EU enlargement. It entails the main advantage of considering the complex simultaneous linkages, interactions and feedback effects between various sectors, institutions and factor resources within an economy, as well as the inter- and intra-industry trade links with other economies across the globe. This technical paper develops a general equilibrium model applied to Romania (GEMAR) with an emphasis on the agricultural and food processing activities. A simple simulation example is then given for illustrative purposes. More extensive use of GEMAR will be made in other forthcoming papers where the model will be employed to identify those economic impacts stemming from incorporating Romania's agricultural and food sectors into EU/CAP structures. The model is static with constant returns to scale and perfect competition in production. Other studies have deployed modelling techniques to deal with EU accession issues. However, the literature assessing separately the economic effects of CAP enlargement for Romania is extremely sparse. In addition, as far as the authors are aware of, there are no studies that solely focused on the likely economic effects of CAP enlargement on Romanian agricultural and food processing sectors at a disaggregated level and within a single-country general equilibrium framework. Hence, the paper should not only fill in a gap in the modelling literature dealing with EU's next phase of eastward expansion but also tackle an issue of current interest for both researchers and policy-makers involved in agriculture and economic development.

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Bibliographic Info

Paper provided by University of Manchester, Institute for Development Policy and Management (IDPM) in its series Impact Assessment Research Centre (IARC) Working Papers with number 30585.

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Date of creation: 2005
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Handle: RePEc:ags:idpmia:30585

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Keywords: Applied General Equilibrium Modelling; Romania; Agriculture; D58; O520; Research Methods/ Statistical Methods;

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  1. Herok, Claudia A. & Lotze, Hermann, 2000. "Implications of an EU Eastern Enlargement Under a New Common Agricultural Policy," Journal of Policy Modeling, Elsevier, vol. 22(6), pages 661-690, November.
  2. Thissen, Mark, 1998. "A classification of empirical CGE modelling," Research Report 99C01, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
  3. Robinson, Sherman & Cattaneo, Andrea & El-Said, Moataz, 2000. "Updating and estimating a Social Accounting Matrix using cross entropy methods," TMD discussion papers 58, International Food Policy Research Institute (IFPRI).
  4. Arjan M. Lejour & Ruud A. de Mooij & Richard Nahuis, 2001. "EU Enlargement: Economic Implications for Countries and Industries," CESifo Working Paper Series 585, CESifo Group Munich.
  5. Frank Fuller & John C. Beghin & Jacinto Fabiosa & Samarendu Mohanty & Cheng Fang & Phillip Kaus, 2002. "Accession of the Czech Republic, Hungary and Poland to the European Union: Impacts on Agricultural Markets," The World Economy, Wiley Blackwell, vol. 25(3), pages 407-428, 03.
  6. Hertel, Thomas W., 2002. "Applied general equilibrium analysis of agricultural and resource policies," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 26, pages 1373-1419 Elsevier.
  7. Serban S. Scrieciu, 2004. "Assessing the Economic Impacts of Incorporating Romania's Agricultural and Food Sectors into EU's Customs Union: an Applied General Equilibrium Approach," Computational Economics 0410004, EconWPA.
  8. Donnelly, William A. & Johnson, Kyle & Tsigas, Marinos E. & Ingersoll, David, 2004. "Revised Armington Elasticities of Substitution for the USITC Model and the Concordance for Constructing a Consistent Set for the GTAP Model," Working Papers 15861, United States International Trade Commission, Office of Economics.
  9. Wahl, Olaf & Weber, Gerald & Frohberg, Klaus, 2000. "Documentation of the Central and Eastern European Countries Agricultural Simulation Model (CEEC-ASIM Version 1.0)," IAMO Discussion Papers 27, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO).
  10. Davies, James B., 2004. "Microsimulation, CGE and Macro Modelling for Transition and Developing Economies," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  11. Patrick J. Kehoe & Timothy J. Kehoe, 1994. "A primer on static applied general equilibrium models," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 2-16.
  12. Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Society for Computational Economics, vol. 14(1-2), pages 1-46, October.
  13. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-51, September.
  14. Perroni, C. & Rutherford, T.F., 1995. "A Comparison of the Performance of Flexible Functional Forms for Use in Applied General Equilibrium Analysis," The Warwick Economics Research Paper Series (TWERPS) 441, University of Warwick, Department of Economics.
  15. Blanchflower, David G., 2001. "Unemployment, Well-Being, and Wage Curves in Eastern and Central Europe," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 364-402, December.
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