Mending the family tree a reconciliation of the linearization and levels schools of AGE modelling
This paper offers a critical comparison between the North American levels school of applied general equilibrium modelling and the Norwegian/Australian school of linearizers. The paper develops both the levels and linearized representations of a neoclassical, multiregion trade model. This development is used to focus attention on similarities and differences between the two schools. The main conclusions are as follows. i) The method used to solve applied general equilibrium models is not really the issue - the solution method used has become short-hand for a host of cultural differences reflecting the orientation of the two groups. ii) Levels or linearized versions of models are equally valid representations. Either representation is a natural starting point for obtaining accurate solutions of the model. iii) Linearized versions ofter aid transparency in explaining the mechanisms at work in a model. iv) In view of recent developments with the GEMPACK software suite, it is no longer necessary for linearizers to settle for solutions containing linearization errors. v) The two schools have a great deal in common and both would benefit from greater cooperation.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- K.R. Pearson, 1986.
"Automating the Computation of Solutions of Large Economic Models,"
Centre of Policy Studies/IMPACT Centre Working Papers
ip-27, Victoria University, Centre of Policy Studies/IMPACT Centre.
- Pearson, K. R., 1988. "Automating the computation of solutions of large economic models," Economic Modelling, Elsevier, vol. 5(4), pages 385-395, October.
- repec:cup:cbooks:9780521319867 is not listed on IDEAS
- K.R. Pearson, 1991. "Solving Nonlinear Economic Models Accurately Via a Linear Representation," Centre of Policy Studies/IMPACT Centre Working Papers ip-55, Victoria University, Centre of Policy Studies/IMPACT Centre.
- Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
- Hanoch, Giora, 1975. "Production and Demand Models with Direct or Indirect Implicit Additivity," Econometrica, Econometric Society, vol. 43(3), pages 395-419, May.
- Harrison, Glenn W. & Jones, Richard & Kimbell, Larry J. & Wigle, Randal, 1993. "How robust is applied general equilibrium analysis?," Journal of Policy Modeling, Elsevier, vol. 15(1), pages 99-115, February.
- Wigle, Randall M, 1991. "The Pagan-Shannon Approximation: Unconditional Systematic Sensitivity in Minutes," Empirical Economics, Springer, vol. 16(1), pages 35-49.
- Dawkins, Christina & Srinivasan, T.N. & Whalley, John, 2001. "Calibration," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 58, pages 3653-3703 Elsevier.
When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:9:y:1992:i:4:p:385-407. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.