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Presentation of the Three-ME model: Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policy

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Abstract

This paper presents the structure and the main properties of Three-ME. This new model of the French economy has been especially designed to evaluate the medium and long term impact of environmental and energy policies at the macroeconomic and sector levels. To do so Three-ME combines two important features. Firstly, it has the main characteristics of neo-Keynesian models by assuming a slow adjustment of effective quantities and prices to their notional level. Compared to standard multi-sectors CGEM, this has the advantage to allow for the existence of under-optimum equilibriums such as the presence of involuntary unemployment. Secondly, production and consumption structures are represented with a generalized CES function which allows for the elasticity of substitution to differ between each couple of inputs or goods. This is an improvement compared to the standard approach that uses nested CES functions which has the disadvantage to impose a common elasticity of substitution between the goods located in two different nested structures.

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  • Frédéric Reynes & Yasser Yeddir-Tamsamani & Gaël Callonec, 2011. "Presentation of the Three-ME model: Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policy," Documents de Travail de l'OFCE 2011-10, Observatoire Francais des Conjonctures Economiques (OFCE).
  • Handle: RePEc:fce:doctra:1110
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    File URL: http://www.ofce.sciences-po.fr/pdf/dtravail/WP2011-10.pdf
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    Cited by:

    1. Després, Jacques & Hadjsaid, Nouredine & Criqui, Patrick & Noirot, Isabelle, 2015. "Modelling the impacts of variable renewable sources on the power sector: Reconsidering the typology of energy modelling tools," Energy, Elsevier, vol. 80(C), pages 486-495.
    2. Bruno Ducoudre & Eric Heyer & Mathieu Plane, 2015. "Que nous apprennent les données macro-sectorielles sur les premiers effets du CICE ?: Evaluation pour la période 2014-2015 T2," Sciences Po publications 2015-29, Sciences Po.
    3. Frédéric Reynès, 2011. "The Cobb-Gouglas function as an approximation of other functions," Documents de Travail de l'OFCE 2011-21, Observatoire Francais des Conjonctures Economiques (OFCE).
    4. repec:spo:wpecon:info:hdl:2441/eu4vqp9ompqllr09i29kgilc0 is not listed on IDEAS
    5. Frédéric Reynès, 2011. "The cobb-douglas function as an approximation of other functions," Working Papers hal-01069515, HAL.
    6. Fabio Bacchini, Maria Elena Bontempi, Cristina Brandimarte, Roberto Golinelli, Cecilia Jona-Lasinio, Carmine Pappalardo, 2013. "The Macroeconometric Models For Italy (Memo-It): Policy Evaluation And Future Challanges," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - Italian Review of Economics, Demography and Statistics, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 67(2), pages 172-179, April-Jun.

    More about this item

    Keywords

    neo-Keynesian model; macroeconomic modeling; energy and environmental policy modeling;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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