Doable General Equilibrium Models: Discussion

Abstract

One of the primary deterrents to the use of CGE analysis is the necessity for a complete set of base period accounts for the economy. The quality of this data base is critical to the CGE exercise because the initial cost and expenditure shares derived from it are just as important as elasticities of substitution in determining simulated price, output, and income effects. As a major producer and user of CGE models, the World Bank (along with others in the development field) has done a lot to promote methods for implementing such national accounts. In particular, the social accounting matrix (SAM) format discussed by Adelman and Robinson is becoming quite standard in the development literature. This stands in sharp contrast to efforts in the United States, where CGE accounting frameworks vary from one researcher to another, making comparison, replication, and establishment of a common data base far more difficult.