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Forward looking dynamics in spatial CGE modelling

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Author Info

  • Johannes Bröcker
  • Artem Korzhenevych

Abstract

This paper sets up a multiregional dynamic framework by combining the optimal savings model with investment adjustment costs and the spatially disaggregated model with Dixit-Stiglitz structure in the modern sector. Because of increasing product diversity on the dynamic equilibrium path, the model belongs to the category of semi-endogenous growth models. The distinction of goods, factors, firms, and households by location, and the incorporation of trade costs in the model allow to study a variety of issues in regional and transport economics. We describe the model calibration and a taylor-made solution algorithm. The functionality is demonstrated using two illustrative examples

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File URL: http://www.ifw-members.ifw-kiel.de/publications/forward-looking-dynamics-in-spatial-cge-modelling/forward-looking-dynamics-in-spatial-cge-modelling
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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1731.

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Length: 26 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:kie:kieliw:1731

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Keywords: spatial dynamic CGE modeling; multiple optimizing agents; transport costs;

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References

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Cited by:
  1. Attila Varga & Péter Járosi & Tamás Sebestyén, 2011. "Modeling the growth effects of regional knowledge production: The GMR-Europe model and its applications for EU Framework Program policy impact simulations," ERSA conference papers ersa11p1426, European Regional Science Association.

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