IDEAS home Printed from https://ideas.repec.org/p/ekd/002672/3913.html
   My bibliography  Save this paper

Validating Policy Induced Economic Change

Author

Listed:
  • M. CARMEN LIMA
  • CARDENETE, M.A.
  • SANCHO, F.

Abstract

This paper explores the capacity of computable general equilibrium (CGE) models to track down policy induced economic changes and their ability to generate contrastable data for an economy. Starting from an empirically built regional Social Accounting Matrix (SAM), a first stage CGE calibrated model is constructed. The model is then perturbed with a set of policy shocks related to European Union Structural Funds 2000-2005 invested into the region of Andalusia in the south of Spain. The counterfactual equilibrium is translated into a virtual SAM, conformal with the initial one, which is in turn reused to calibrate the next stage in the CGE modeling. And so on until the last stage is reached and all European funds yearly invested have been absorbed by the economy. Since at the end of the process another empirical SAM is available, it can be compared with the terminally produced virtual SAM. The comparison shows the sequence of SAMs to provide a very good fit to the actual data in the empirical SAM. Regional GDP and unemployment rates are two examples of the close approximation. With this novel approach, the projection capabilities of CGE modeling are evaluated from the methodological viewpoint, and at the same time an empirical assessment of the said European policies is provided.

Suggested Citation

  • M. Carmen Lima & Cardenete, M.A. & Sancho, F., 2012. "Validating Policy Induced Economic Change," EcoMod2012 3913, EcoMod.
    • Handle: RePEc:ekd:002672:3913
    as

    Download full text from publisher

    File URL: http://ecomod.net/system/files/ECOMOD%202012_%20VALIDATING%20POLICY%20INDUCED%20ECONOMIC%20CHANGE_CLS.doc
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ekd:002672:3913. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Theresa Leary (email available below). General contact details of provider: https://edirc.repec.org/data/ecomoea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.