Deriving CGE Baselines from Macro-economic Projections
Quantitative policy analysts are usually confronted with the problem to derive a base-line scenario that reflects the most likely state of an economy in a future year. The methods used in practice to derive such a base-line scenarios are heterogeneous and range from the usage of the last observable year to complete and consistent estimation procedures. In the case of general equilibrium (CGE) analyses, the Scenar2020 project (European Commission 2006a) is one example how projections of macro-economic indicators (exogenous drivers) are used to construct the base-line as a model scenario: Starting from a calibrated version, exogenous variables are modified until macro-economic projections are met. However, numerous projections refer to economic indicators which are endogenous variables within the CGE framework, such as gross domestic product (GDP), market prices, or produced quantities. To investigate methods that allow integrating projections for endogenous CGE variables is the main topic of this study. Our starting point is the work by Arndt et al (2002), where entropy-based (Golan et al 1996) techniques are employed for the estimation of behavioural parameters by fitting a CGE model to time series on endogenous variables. Following this concept, we investigate a method to fit a CGE´s parameters and endogenous variables to market- and macro-economic projections from major research institutes.
|Date of creation:||02 Sep 2011|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.eaae.org|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sherman Robinson & Andrea Cattaneo & Moataz El-Said, 2001.
"Updating and Estimating a Social Accounting Matrix Using Cross Entropy Methods,"
Economic Systems Research,
Taylor & Francis Journals, vol. 13(1), pages 47-64.
- Robinson, Sherman & Cattaneo, Andrea & El-Said, Moataz, 2000. "Updating and estimating a Social Accounting Matrix using cross entropy methods," TMD discussion papers 58, International Food Policy Research Institute (IFPRI).
- Golan, Amos & Judge, George & Robinson, Sherman, 1994. "Recovering Information from Incomplete or Partial Multisectoral Economic Data," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 541-49, August.
- Arndt, Channing & Robinson, Sherman & Tarp, Finn, 1999.
"Parameter estimation for a computable general equilibrium model: a maximum entropy approach,"
TMD discussion papers
40, International Food Policy Research Institute (IFPRI).
- Arndt, Channing & Robinson, Sherman & Tarp, Finn, 2002. "Parameter estimation for a computable general equilibrium model: a maximum entropy approach," Economic Modelling, Elsevier, vol. 19(3), pages 375-398, May.
- Heckelei, Thomas & Mittelhammer, Ronald C. & Jansson, Torbjorn, 2008. "A Bayesian Alternative To Generalized Cross Entropy Solutions For Underdetermined Econometric Models," Discussion Papers 56973, University of Bonn, Institute for Food and Resource Economics.
- Peter B. Dixon & Maureen T. Rimmer, 2009. "Forecasting with a CGE model: does it work?," Centre of Policy Studies/IMPACT Centre Working Papers g-197, Victoria University, Centre of Policy Studies/IMPACT Centre.
- Sandra Poncet, 2006. "The Long Term Growth Prospects of the World Economy: Horizon 2050," Working Papers 2006-16, CEPII research center.
- Decreux, Yvan & Valin, Hugo, 2007.
"MIRAGE, Updated Version of the Model for Trade Policy Analysis: Focus on Agriculture and Dynamics,"
7284, TRADEAG - Agricultural Trade Agreements.
- Yvan Decreux & Hugo Valin, 2007. "MIRAGE, Updated Version of the Model for Trade Policy Analysis: Focus on Agriculture and Dynamics," Working Papers 2007-15, CEPII research center.
When requesting a correction, please mention this item's handle: RePEc:ags:eaae11:114638. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.