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GEMPACK: History, How it Works and an Application to New Quantitative Trade Modelling

Author

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

Abstract

Computable General Equilibrium (CGE) modelling started with the publication in 1960 of Johansen's model of Norway. It continues to the present time as an active research and policy field. In a recent count, there were 33,000 people in the GTAP CGE modelling network alone. This paper identifies GEMPACK software, developed in Australia for solving large scale CGE models in the Johansen school, as one of the factors contributing to the enduring popularity of CGE. The paper tells the story of how GEMPACK came into existence, how it works, and how it relates to Johansen. The paper was prepared for a workshop on bridging the gap between CGE and New Quantitative Trade (NQT) models. In illustrating GEMPACK and showing connections between CGE and NQT, we present a GEMPACK solution and analysis of Eaton and Kortum's seminal NQT model, published in Econometrica in 2002.

Suggested Citation

  • Peter B. Dixon & Maureen T. Rimmer, 2025. "GEMPACK: History, How it Works and an Application to New Quantitative Trade Modelling," Centre of Policy Studies/IMPACT Centre Working Papers g-357, Victoria University, Centre of Policy Studies/IMPACT Centre.
    • Handle: RePEc:cop:wpaper:g-357
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    References listed on IDEAS

    as
    1. Zeynep Akgul & Nelson B Villoria & Thomas W Hertel, 2016. "GTAP-HET: Introducing Firm Heterogeneity into the GTAP Model," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(1), pages 111-180, June.
    2. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
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    4. James Markusen, 2023. "Incorporating Theory-Consistent Endogenous Markups into Applied General-Equilibrium Models," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 8(2), pages 60-99, December.
    5. Hanoch, Giora, 1971. "CRESH Production Functions," Econometrica, Econometric Society, vol. 39(5), pages 695-712, September.
    6. Hertel, Thomas W. & Mark Horridge, J. & Pearson, K. R., 1992. "Mending the family tree a reconciliation of the linearization and levels schools of AGE modelling," Economic Modelling, Elsevier, vol. 9(4), pages 385-407, October.
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    Keywords

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    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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