Computable General Equilibrium Model for Croatian Economy

Computable General Equlibrium models or CGE models, are one of the most useful models in a global development planning and macroeconomic analysis. CGE models are discovered in 1960., but there was no major development until 1978. These models have become a standard tool of empirical economic analysis. These models dominate in major part of applied econometric analysis, which is involved on problem solving in economic development and local economic policies. They are inevitable tools for analysis in international trade and government planning, changes in oil markets, and at the same time they are used in the analysis in tax reforms, welfare distributions, and even in the analysis of global warming. From that it concludes that uses of CGE models are very wide-spread. In the last few years, improvements in a specification of the model, availability of data and development in computer technology results in increased efficiency and reduced cost of analysis, which is based on CGE models. CGE models are most commonly used for analysis in countries that are in transition, but basic framework and specification of a model can be used from global to the local level.