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A Computable General Equilibrium Model for Corsica

Author

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  • Martin Henseler

    (LERN - Laboratoire d'Economie Rouen Normandie - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université, PEP - Partnership for Economic Policy)

Abstract

Regional economies often experience economic shocks and policy interventions differently from national economies because of their specific economic structures, resource endowments, and trade dependencies. This paper develops the first standalone computable general equilibrium (CGE) model for Corsica, a French NUTS2 island region characterised by strong specialisation in tourism, agriculture, trade, and transport activities. The model is based on the PEP-1-1 standard model and calibrated to a regional Social Accounting Matrix representing the Corsican economy in the year 2017. To better reflect regional labour market conditions, the standard model is extended by incorporating unemployment and a wage-curve specification. The framework is applied to three stylised scenarios examining reforms to tourism and agricultural support measures as well as changes in world market prices for agricultural commodities. The simulations illustrate the economy-wide effects of policy and market changes on production, household income, and government revenues. The model provides a useful tool for regional policy analysis and a foundation for future extensions addressing sustainability, energy, and water-related challenges in Corsica.

Suggested Citation

  • Martin Henseler, 2026. "A Computable General Equilibrium Model for Corsica," Working Papers hal-05664092, HAL.
    • Handle: RePEc:hal:wpaper:hal-05664092
    Note: View the original document on HAL open archive server: https://hal.science/hal-05664092v2
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