Forward looking dynamics in spatial CGE modelling
AbstractThis 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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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1731.
Length: 26 pages
Date of creation: Sep 2011
Date of revision:
spatial dynamic CGE modeling; multiple optimizing agents; transport costs;
Find related papers by JEL classification:
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-09-16 (Agricultural Economics)
- NEP-ALL-2011-09-16 (All new papers)
- NEP-EFF-2011-09-16 (Efficiency & Productivity)
- NEP-ENE-2011-09-16 (Energy Economics)
- NEP-ENV-2011-09-16 (Environmental Economics)
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