IDEAS home Printed from https://ideas.repec.org/a/sae/engenv/v16y2005i6p901-921.html
   My bibliography  Save this article

Analysing Convergence with a Multi-Country Computable General Equilibrium Model: PPP versus Mer

Author

Listed:
  • Peter B. Dixon
  • Maureen T. Rimmer

Abstract

In studies of the greenhouse gas implications of convergence by developing countries to the per-capita GNPs of developed countries, considerable discussion has centred on whether purchasing power parity (PPP) or market exchange rates (MER) should be used in measuring per-capita GNPs. We suggest that technology gaps between developing and developed countries should be the starting point for convergence analysis rather than per-capita GNP gaps. We estimate two sets of initial technology gaps, using PPP and MER price assumptions combined with input-output data. In simulating the effects of closing technology gaps (convergence) using a dynamic, multi-country CGE model, we find: the MER/PPP distinction matters. MER-based estimates of initial technology gaps lead to higher estimates of convergence-induced growth in greenhouse-gas-emitting industries in developing countries than do PPP-based estimates. the industry detail in CGE models is valuable. Our simulations show a wide range of convergence-induced changes in output across industries.

Suggested Citation

  • Peter B. Dixon & Maureen T. Rimmer, 2005. "Analysing Convergence with a Multi-Country Computable General Equilibrium Model: PPP versus Mer," Energy & Environment, , vol. 16(6), pages 901-921, November.
  • Handle: RePEc:sae:engenv:v:16:y:2005:i:6:p:901-921
    as

    Download full text from publisher

    File URL: http://eae.sagepub.com/content/16/6/901.abstract
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tol, Richard S.J., 2007. "Carbon dioxide emission scenarios for the USA," Energy Policy, Elsevier, vol. 35(11), pages 5310-5326, November.
    2. Pant, Hom M. & Fisher, Brian S., 2007. "Alternative measures of output in global economic-environmental models: Purchasing power parity or market exchange rates? -- Comment," Energy Economics, Elsevier, vol. 29(3), pages 375-389, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:engenv:v:16:y:2005:i:6:p:901-921. 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: (SAGE Publications). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.