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Contribution of Computable General Equilibrium Modeling to Policy Formulation in Developing Countries

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  • Devarajan, Shantayanan
  • Robinson, Sherman

Abstract

This chapter reviews the experience of computable general equilibrium (CGE) models from the perspective of how they have, or have not, influenced public policy in developing countries. The paper describes different classes of empirical models – from small, stylized to large, multisectoral applied models; from static equilibrium models to dynamic, perfect-foresight models – and identifies the characteristics of models best suited to address different policy problems in developing countries. The paper then discusses the different ways CGE models have been and are being used in policy formulation, the types of questions they have addressed, and the lessons learned from past experience. Finally, the paper suggests that, in light of the changing nature of policy making in developing countries, in the future CGE models should be used differently, moving from a purely technocratic exercise used by policy makers to providing an accessible empirical framework that can contribute to a widespread public debate.

Suggested Citation

  • Devarajan, Shantayanan & Robinson, Sherman, 2013. "Contribution of Computable General Equilibrium Modeling to Policy Formulation in Developing Countries," Handbook of Computable General Equilibrium Modeling, Elsevier.
  • Handle: RePEc:eee:hacchp:v:1:y:2013:i:c:p:277-301
    DOI: 10.1016/B978-0-444-59568-3.00005-5
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    References listed on IDEAS

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    1. repec:eee:rensus:v:78:y:2017:i:c:p:61-71 is not listed on IDEAS
    2. Go, Delfin S. & Lofgren, Hans & Ramos, Fabian Mendez & Robinson, Sherman, 2016. "Estimating parameters and structural change in CGE models using a Bayesian cross-entropy estimation approach," Economic Modelling, Elsevier, vol. 52(PB), pages 790-811.
    3. repec:eee:retrec:v:61:y:2017:i:c:p:44-55 is not listed on IDEAS

    More about this item

    Keywords

    Computable general equilibrium modeling; economic development; policy modeling; computable general equilibrium in democracy;

    JEL classification:

    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • F1 - International Economics - - Trade
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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