Introduction

This volume collects papers written over the period 1975–1995 when I was active in general equilibrium modelling. At the time, applied (often called computable) general equilibrium (CGE) modeling was as much about solving models as it was about the study of the effects of policies on resource allocation and welfare. Two strands were developing independently. One, at Yale, pursued by Shoven and Whalley, used solution methods developed by Scarf (1973) to study the effects of taxation policies (fiscal and trade) on resource allocation in a world of perfect competition à la Arrow and Debreu. The objective was to quantify the efficiency effects of tax reforms in an economy-wide setting (Shoven and Whalley, 1992). The other strand was pursued at the World Bank's research department (Adelman and Robinson, 1978; Dervis et al., 1982). There, emphasis was on the structural/dualistic features of developing economies (Chenery, 1979) and about reaching internal-external balance in the face of external and internal shocks. Quantifying the medium to long-run economy-wide effects of macro (exchange rate) and micro (mostly trade) policies on wages, prices, the distribution of income, patterns of industrialization and rural-urban linkages was to help inform World Bank lending activities…