Calibrating Long-Term Trade Baselines in General Equilibrium

Elaborating on seminal calibrations of baselines of global models by the GTAP community, the World Bank, the OECD and IIASA, we combine a fully-fledged macro-econometric growth model (MaGE) with a Computable General Equilibrium Model (MIRAGE) and contribute two baselines for the word economy. Doing so, we rely on a cross-cutting approach which mixes a theoretically founded macroeconomic framework with a dynamic global and multi-sector model, maximizing consistency between them. Migrations, projected by an external model are also taken on board. We implement the introduction of a 2-step baseline to cope with baseline policy assumptions that may have large impacts on long run growth of gross domestic product (GDP). We also show how retroactions between baseline assumptions and macroeconomic fundamentals such as the current account and labor participation rate may impact the model outcomes and should therefore be implemented in the macroeconomic projections. Recent developments of the MIRAGE model are considered, such as the introduction of greenhouse gases emissions. Finally, we calibrate the baseline to take stock of the long term trade to income elasticity.