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Alternative Solution Methods in Applied General Equilibrium Analysis

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  • Richard G. Harris

Abstract

This paper discusses the relative strengths and weaknesses of alternative solution methods in applied general equilibrium (AGE) analysis. The particular focus is not on the technical properties of solution algorithms, but instead deals with the general issue of using linearised approximation methods, more popularly referred to as the Johansen class of AGE models, relative to models which are solved in level form via solution of a system of non-linear equations. Particular attention is given to the practical aspects of AGE empirical work with special emphasis on problems encountered in multi-country modelling. Ce texte décrit les forces et faiblesses relatives de différentes méthodes de solution utilisées dans l'analyse appliquée d'équilibre général. L'objet essentiel de ce document ne porte pas sur les propriétés techniques des algorithmes de solution, mais plutôt sur la question générale de l'utilisation de méthodes d'approximation linéaire, populairement appelées modèles de type Johansen, par rapport au choix de méthodes visant à solutionner le modèle en niveau à l'aide d'un système d'équations non-linéaires. Une attention particulière est portée aux aspects pratiques de l'analyse empirique effectuée à l'aide de tels modèles et notamment aux problèmes rencontrés dans le cadre d'une modélisation comportant plusieurs pays.

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File URL: http://dx.doi.org/10.1787/830687701718
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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 53.

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Date of creation: Apr 1988
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Handle: RePEc:oec:ecoaaa:53-en

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Cited by:
  1. Peichl, Andreas & Fuest, Clemens & Schaefer, Thilo, 2005. "Dokumentation FiFoSiM: Integriertes Steuer-Transfer-Mikrosimulations- und CGE-Modell," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 05-3, University of Cologne, FiFo Institute for Public Economics.

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