COMPUTABLE GENERAL EQUILIBRIUM MODELS FOR SOCIALIST ECONOMIES

Abstract

During the past decade, multisectoral computable general equilibrium (CGE) models have been widely used in developing countries to analyse issues as income distribution and structural adjustment. These models simulate the workings of a market economy, but a suitable adapted CGE model can provide a good framework for policy analysis in a post-reform socialist economy. CGE models have been developed for two Eastern European countries Hungary and Yugoslavia to analyze issues of structural adjustment. In this paper, we describe the basic features of the Hungarian and Yugoslav CGE models, identifying the important similarities and differences between them. We focus the discussion more on the Hungarian model, and also present some results of simulation of it.