A Computable General Equilibrium Model for Climate and Trade Policy Analysis

Abstract

General equilibrium models provide a consistent framework for studying price-dependent interactions between all markets of the economy. The simultaneous explanation of the origin and spending of the economic agents’ income allows addressing both economy-wide efficiency effects and distributional implications of policy interference. Therefore, computable general equilibrium (CGE) models have become the standard tool for the analysis of the economy-wide impacts of climate and trade policies on resource allocation and the associated implications for incomes of economic agents (see e.g. Weyant, 1999 for a recent survey on applications to climate policy; Shoven and Whalley, 1984 and 1992, provide an introduction to trade policy analysis).KeywordsComputable General EquilibriumFinal DemandComputable General Equilibrium ModelSocial Account MatrixSubstitution ElasticityThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.