Cardenete M.A., Guerra A.-I., Sancho F. Applied General Equilibrium: An Introduction

Springer – 2012, 125 p.
ISBN: 9783642247453This advanced textbook aims at providing a simple but fully operational introduction to applied general equilibrium. General equilibrium is the backbone of modern economic analysis and as such generation after generation of economics students are introduced to it. As an analytical tool in economics, general equilibrium provides one of the most complete views of an economy since it incorporates all economic agents (households, firms, government, foreign sector) in an integrated way that is compatible with microtheory and microdata. The integration of theory and data handling is required for successful modeling but it requires a double ability that is not found in standard books. With this book we aim at filling the gap and provide advanced students with the required tools, from the building of consistent and applicable general equilibrium models to the interpretation of the results that ensue from the adoption of policies. The topics include: model design, model development, computer code examples, calibration and data adjustments, practical policy examples.An Overview of GeneralEquilibrium Theory
Agents, Behavior and Markets
Positive Analysis of the Walrasian Equilibrium
Walras’ Law and the Walrasian Equilibrium: Definitions
Existence and Uniqueness of Walrasian Equilibrium
Normative Properties of Walrasian EquilibriumA Simple GeneralEquilibrium Model
Households
Firms
Equilibrium
A Simple Example
The Numerical SolutionAppendix: The Detailed Equations of the General
Equilibrium Example
Appendix GAMS Code for Solving the Simple
General Equilibrium ModelA Genera Equilibrium Model with a Government Sector
An Indirect Tax on Output with Lump-Sum Transfers
The Micro Effects of Output Taxes: An Example
The Aggregate Effects of the Output Tax
Factor and Income Taxes
The Effects of Factor and Income Taxes:
Another Example
Savings, Investment, and the Government Budget Constraint
Government Activities with a Balanced Budget
Running a Non-balanced Budget
Investment and Savings
The Equilibrium System
Taxes, Expenditure and the Deficit: A Final ExampleAppendix: GAMS Code for the CGE Model Generating Tables
Appendix GAMS Code for the CGE Model GeneratingFurther Extensions of the Model: ExternalSector, Labor
Market and Consumption Technology
The External Sector
The Armington Assumption
Equilibrium and Model Closure
Tariffs
The Labor Market
The Consumption TechnologyData Base and Model Calibration
Social Accounting Matrices
A Simple Macroeconomic SAM
A Detailed Microeconomic SAM
Assembling a SAM
Calibration
Calibration of Cobb–Douglas Utility Functions
Calibration of Cobb–Douglas Production Functions
Calibration of CES Production Functions
Calibration in the Presence of Taxes
Calibration of the Fixed Coefficients Technology
Calibration of Tax RatesReal-WorldExamples of Applied GeneralEquilibrium Analysis
Theoretical Origins
From Theory to Applications
Computational Issues
Representative Uses of AGE Analysis and Models
Fiscal Policies
Trade Policies
Stabilization Policies
Environmental Analysis