Shaping baseline scenarios of economic activity with CGE models: introduction to the special issue

Abstract

This introductory paper to the special issue on shaping long-term baselines with Computable General Equilibrium (CGE) models presents the main challenges and opportunities in constructing numerical scenarios of future economic activity using CGE models. Better understanding the role of socioeconomic drivers in baseline scenarios allows for better understanding of policy scenarios. The combined set of papers in this special issue provides three key contributions to the literature. First, it highlights the need and room for improved transparency and possibly harmonisation of baseline assumptions, while avoiding herding behaviour where all models make identical assumptions. Secondly, it raises awareness of the crucial role of the baseline in quantitative dynamic CGE analysis. Thirdly, it provides the means and incentives to modelling teams to construct more sophisticated baselines by showing practices used in advanced large-scale models and highlighting the role of different drivers. It is the objective of this special issue to set a research agenda, encouraging greater attention to baseline scenarios in the research literature.