INTRODUCTION TO COMPUTABLE GENERAL EQUILIBRIUM MODELS BURFISHER PDF

This book provides a practical, how-to guide to CGE models suitable for use at the undergraduate college level. Its introductory level distinguishes it from Computable general equilibrium CGE models are widely used by governmental organizations and academic institutions to analyze the economy-wide effects of events such as climate change, tax policies, and immigration. Its introductory level distinguishes it from other available books and articles on CGE models. The book provides intuitive and graphical explanations of the economic theory that underlies a CGE model and includes many examples and hands-on modeling exercises. It may be used in courses on economics principles, microeconomics, macroeconomics, public finance, environmental economics, and international trade and finance, because it shows students the role of theory in a realistic model of an economy.

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Introduction to Computable General Equilibrium Models

Overview[ edit ] A CGE model consists of equations describing model variables and a database usually very detailed consistent with these model equations. The equations tend to be neo-classical in spirit, often assuming cost-minimizing behaviour by producers, average-cost pricing, and household demands based on optimizing behaviour. However, most CGE models conform only loosely to the theoretical general equilibrium paradigm. For example, they may allow for: non-market clearing, especially for labour unemployment or for commodities inventories imperfect competition e. Usually the database is presented as an input-output table or as a social accounting matrix SAM. In either case, it covers the whole economy of a country or even the whole world , and distinguishes a number of sectors, commodities, primary factors and perhaps types of household. Sectoral coverage ranges from relatively simple representations of capital, labor and intermediates to highly-detailed representations of specific sub-sectors e.

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