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Linking Global CGE Models with Sectoral Models to Generate Baseline Scenarios: Approaches, Challenges, and Opportunities

Author

Listed:
  • Ruth Delzeit
  • Robert Beach
  • Ruben Bibas
  • Wolfgang Britz
  • Jean Chateau
  • Florian Freund
  • Julien Lefevre
  • Franziska Schuenemann
  • Timothy Sulser
  • Hugo Valin
  • Bas van Ruijven
  • Matthias Weitzel
  • Dirk Willenbockel
  • Krzysztof Wojtowicz

Abstract

When modelling medium and long-term challenges we need a reference path of economic development (the so-called baseline). Because sectoral models often offer a more fundamental understanding of future developments for specific sectors, many CGE modeling teams have adopted different kinds of linking approaches to sectoral models to generate baselines. We systematically compare and discuss approaches of linking CGE models for the baseline calibration procedure, and discuss best practices and pitfalls. We identify different types of linking approaches which we divide into a) links with partial equilibrium models, and b) links with non-economic models. These two types of linking approaches are then analyzed with respect to e.g. the degree of linkage, information exchanged, as well as compromises in aggregations and definitions. Based on this, we discuss potential drawbacks and conclude with suggestions for best practices and research recommendations.

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  • Ruth Delzeit & Robert Beach & Ruben Bibas & Wolfgang Britz & Jean Chateau & Florian Freund & Julien Lefevre & Franziska Schuenemann & Timothy Sulser & Hugo Valin & Bas van Ruijven & Matthias Weitzel &, 2020. "Linking Global CGE Models with Sectoral Models to Generate Baseline Scenarios: Approaches, Challenges, and Opportunities," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 5(1), pages 162-195, June.
  • Handle: RePEc:gta:jnlgea:v:5:y:2020:i:1:p:162-195
    DOI: http://dx.doi.org/10.21642/JGEA.050105AF
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    1. Taran Faehn & Gabriel Bachner & Robert Beach & Jean Chateau & Shinichiro Fujimori & Madanmohan Ghosh & Meriem Hamdi-Cherif & Elisa Lanzi & Sergey Paltsev & Toon Vandyck & Bruno Cunha & Rafael Garaffa , 2020. "Capturing Key Energy and Emission Trends in CGE models: Assessment of Status and Remaining Challenges," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 5(1), pages 196-272, June.
    2. Emanuele Ferrari & Thomas Chatzopoulos & Ignacio Perez Dominguez & Pierre Boulanger & Kirsten Boysen-Urban & Mihaly Himics & Robert M’barek, 2021. "Cumulative economic impact of trade agreements on EU agriculture: 2021 update," JRC Working Papers JRC123037, Joint Research Centre (Seville site).
    3. Shahriyar Nasirov & Raúl O’Ryan & Héctor Osorio, 2020. "Decarbonization Tradeoffs: A Dynamic General Equilibrium Modeling Analysis for the Chilean Power Sector," Sustainability, MDPI, Open Access Journal, vol. 12(19), pages 1-19, October.
    4. Jean Chateau & Erwin Corong & Elisa Lanzi & Caitlyn Carrico & Jean Fouré & David Laborde, 2020. "Characterizing Supply-Side Drivers of Structural Change in the Construction of Economic Baseline Projections," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 5(1), pages 109-161, June.
    5. Jean Foure & Angel Aguiar & Ruben Bibas & Jean Chateau & Shinichiro Fujimori & Julien Lefevre & Marian Leimbach & Luis Rey-Los-Santos & Hugo Valin, 2020. "Macroeconomic Drivers of Baseline Scenarios in Dynamic CGE models: Review and Guidelines Proposal," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 5(1), pages 28-62, June.

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    More about this item

    Keywords

    Computable general equilibrium models; Model linking baseline scenario; Partial equilibrium model;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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