CGE modelling

The cruise industry worldwide has increased rapidly since the beginning of the millennium. Hawaii is no exception to this. Since the 1970s, cruise ships periodically visited the Hawaiian Islands, yet overnight cruising among the islands was rare. From 2001 to 2004, cruise ships sailing to and around Hawaii were solely foreign-flagged ships, including those home based in Hawaii. This meant much of the tourism revenue and taxes did not accrue to the local economy. Since July 2004, in addition to the foreign-flagged ships, a U.S.-flagged ship has been home-ported in the islands, paying Hawaii taxes and hiring U.S. crews with two more U.S.-flagged ships being added to the fleet in 2005 and 2006. This article uses a computable general equilibrium (CGE) model to estimate the economywide economic impact of the cruise industry on the state of Hawaii. Using the 2002 intercounty input-output table as a benchmark, the multiregion CGE model takes the direct expenditure estimates of cruise passengers, expenditure by cruise crews, and the direct expenditures by the cruise lines, as computed by the State of Hawaii and uses these direct impacts as simulations in the CGE model. Gross value added and welfare are calculated for each county and the state as a whole. Some regions benefit more than others.

Major sports events are used increasingly by policy-makers to stimulate economic development. This has resulted in a growth of academic interest in ways of analysing their contribution. Following a review of the literature on the contrasting approaches that have been used, this paper assesses the economic impact of the Beijing Olympics, in particular the tourism impact, using computable general equilibrium (CGE) modelling. To add novelty, it analyses the data under conditions of imperfect competition, an approach that has been used to good effect in other contexts, notably international trade. The findings suggest that staging the Beijing Olympics brought economic benefits to the host economy but that the scale of the impact was not significant compared to the total size of the economy. The welfare impacts of the Beijing Olympics under imperfect competition are shown to be higher than when perfect competition is assumed. This is explained by the pro-competitive effect.

Bu araştırma, Sosyal Hesaplar Matrisinin kuramsal yapısının anlatılması ve ülkemizde bu konuda yapılmış çalışmalara değinilmesi amacıyla hazırlanmıştır.Bu uygulama yapılırken kısmi denge ve zaman serisi yaklaşımlarıyla çalışan modellerin, genel denge modelleriyle dengelenmesi gerekmektedir. Anlaşılacağı üzerine SHM’ler genel denge ile bağa sahiptir ve bundan dolayı çalışmada Hesaplanabilir Genel Denge Modellerine de değinilecektir. Son nesil genel denge modellerinin genişletilmiş bir örneği olan IMMPA (Integrated Macroeconomic Model for Poverty Analysis), 1996 SHM’si üzerine çalışmaktadır.Bu kapsamda araştırma dört bölümden oluşmaktadır. İkinci bölüm araştırılan yöntemlerin teorik ve teknik yapısının tanıtılmasına ayrılmıştır. Öncelikle HGD modelleri hakkında bilgi verilmiş ve Türkiye verileri kullanılarak bu teknikle yapılan çalışmalardan örnekler verilmiştir. Ardından SHM tanıtılmış ve basit bir SHM kurularak anlatım pekiştirilmiştir. Ardından HGD’de olduğu gibi çok az sayıdaki SHM çalışmasından yakın tarihimizde yapılmış ulaşın çalışmalar hakkında bilgi verilmiştir.
Hitit Üniversitesi İİİBF İktisat Bölümü , Erginbay Uğurlu

This paper assesses human capital development policies and their impact on economic growth and households' well-being in Côte d'Ivoire. A dynamic computable general equilibrium model was used to measure the impact of public spending on education and health policies as predicted by the government and then the effects of a larger increase of those spending on economic growth and household welfare in Côte d'Ivoire. The simulations results show that public spending in education and health has positive impacts on education and health demands, on the improvement of labor's factor quality and on the productive capacities of poor and vulnerable households. The results also show that there is a positive correlation between public expenditures on education and health, economic growth and welfare in Côte d'Ivoire. Résumé Ce papier évalue les politiques de développement du capital humain et leur impact sur la croissance économique et le bien-être des ménages en Côte d'Ivoire. Un modèle d'équilibre général calculable dynamique a été utilisé pour mesurer l'impact des politiques de dépenses publiques d'éducation et de santé telles que prévues par le gouvernement et ensuite les effets d'un accroissement plus important de ces dépenses sur la croissance économique et le bien-être des ménages en Côte d'Ivoire. Les résultats des simulations montrent que les dépenses publiques d'éducation et de santé ont des impacts positifs sur la demande d'éducation et de santé, sur l'amélioration de la qualité du facteur travail et les capacités productives des ménages pauvres et vulnérables. Ils révèlent également qu'il y'a une corrélation positive entre les dépenses publiques d'éducation et de santé, la croissance économique et le bien-être en Côte d'ivoire.

The agro-industrial sector is the largest contributor in the industry sector, but its contribution to GDP (Gross Domestic Product) has consistently declined each year. The average growth of this sector is only around four per cent for the period 1999-2012. Decline in the share of agro industry to GDP is predicted due to lack of availability of raw materials and low productivity of the agricultural sector.
The Ministry of Industry through a policy of acceleration and expansion strategy seeks to encourage the development of agro-industry support infrastructure in line with the master plan for economic development expansion and acceleration program in Indonesia (MP3EI). The Government will provide incentives to employers who supply the raw materials to country, and disincentives (duty) for the export of raw materials. The government is gradually trying to attract local and foreign investors to develop the agro-industry. In addition, the government through its strategic plan has allocated a budget to increase the productivity of the agricultural sector, due to the stagnation in the agricultural sector. Increased productivity is expected to encourage downstream agro industry.
This study will focus on the export tax and productivity increment policies on export commodities as the main policies chosen for the development of downstream agro industry. The main export commodities in this study are tax imposed export commodities. The model used to measure the impact of the policy is a comparative static CGE (Computable General Equilibrium) model. In addition this model is also able to measure the impact of macroeconomic, sectoral economy, and measure the impact on household income distribution groups.
The results show that the export tax policies have a negative impact on economic growth (real GDP). The decline is due to the decline in value of exports, real household consumption, real investment and real government expenditures. If the success of the national economy is only assessed by macroeconomic indicators, the policy is judged to be a pro to national economic growth, and worsen the competitiveness of exports. Conversely, if the export policy is accompanied by an increase in the productivity of the upstream sector, it will have a positive impact on real GDP. The increase in real GDP would be higher if the export tax policy and increased productivity upstream sector is accompanied by an increased productivity in downstream sectors.
Export tax policy could restrain export growth in the sectors imposed tax with or without an increase in productivity of the upstream and downstream sectors of agro-based industries. The decline in exports become smaller if accompanied an increase in productivity of the tax imposed export commodities. This is consistent with the expectations of the export tax enforcement policy, which restrains the growth rate of exports. The same thing happened in the sectoral imports. The decline in exports has prompted an increase in domestic output in certain agro-industrial subsectors. However, if it is followed by an
increase in the productivity of the upstream and downstream sectors of agro-based industries, domestic output will increase at each agro industry and agriculture sub- sector. The increase in output is accompanied by a decrease of sectoral output prices, especially agro-industrial sector and the agricultural sector. The policy also affects the employment sector, where in general an increase in employment, except in the palm oil sector.
If the export tax policy is implied with or without an increase in the productivity of the upstream and downstream sectors, it will increase the income of the non-farm household, and a decrease in the income group of farm households. The policy worsens the distribution of income and welfare among household groups.
Based on the results of research, the policy implications that can be suggested, are: (1) The realization of the strategic plan of the Ministry of Agriculture and Ministry of Industry related with productivity improvements in upstream and downstream sectors of agro industries becomes a necessary condition of encouraging downstream agro industry. It takes strategic measures to encourage increased productivity, both through increasing labor productivity (by increasing the expertise and skills) as well as increase the efficiency of the use of various material inputs and capital equipment, an increase in research activities, and technology development. Development of agro industries that only depends on the export policy is a misleading decision either macroeconomic, sectoral, and income distribution point of views. (2) The government needs to create a strategy to compensate the decline in household incomes through the redistribution of agricultural export tax revenues, as practiced by the government of Ghana. Export tax revenue redistribution scheme can be done by providing cheap credit for farmers, where credit payments are based on the pattern of farmers' income. (3) The government should help in increasing farm household productivity through rejuvenation of old plants, the use of seeds waiting, as well as proper maintenance, fertilization, and cultivation. (4) Suggestions for further research would be to develop recursive or fully dynamic CGE models for the simulations in this research. The aim is so the model will be able to respond to as well as simplify the dynamics of change in time and to empirically predict for a specific period of time.
Keywords: agro industry, export tax, productivity, CGE, real GDP, household income

There is no place where economics and ecosystem science, in particular climate science, are more intimately connected than in the IPCC climate scenarios, their Integrated Assessment Models (IAMs) and the conclusions derived from them. In official parlance, their results should be “policy relevant but not policy prescriptive”. Nonetheless past policy discussions have shown that both the climate science part with its scenarios of droughts, floods and storms (e.g., IPCC, 2014a), and the economic part with cost calculations and suggestions for efficient policy strategies (e.g., IPCC, 2014b) have been influential. In the reports, and in particular in IAMs, both are merged, assuming that both disciplines provide adequate descriptions of the parts of reality they are in charge of analysing and understanding. But do they?

En este trabajo se evalúa la incidencia del sector petrolero en términos de los efectos sobre el crecimiento económico en un régimen que hemos llamado de Apertura Petrolera (1989-1998) versus otro que hemos denominado de Soberanía Petrolera (1999-2008).  La metodología utilizada para este trabajo se basa en los llamados multiplicadores de Matrices de Contabilidad Social (MCS) disponible para Venezuela para los años 1993 y 1997- 2005.  Se toman como inyecciones petroleras en la economía las variables exportación, aporte fiscal, inversión productiva e inversión social y se evalúan con los multiplicadores de las MCS los efectos sobre el PIB total de la economía y de esta forma el aporte de cada una de estas variables exógenas al crecimiento económico en cada período. Se encuentra  en ambos períodos una alta incidencia de las variables petroleras en el comportamiento global de la actividad económica, no obstante la naturaleza de las mismas varían en forma significativa. Se discuten las implicaciones de política de estos resultados.

A B S T R A C T Using a global computable general equilibrium model, this paper investigates the macroeconomic impact of China's Belt and Road Initiative (BRI). Accounting for the externalities of infrastructure development with respect to trade cost reduction and energy efficiency improvement, the analysis finds BRI would bring sizable benefits to the world economy in terms of welfare and trade, even under conservative assumptions about the size of total investment under the initiative. However, China and other BRI countries need to address several important challenges in order to implement this initiative with success and realize these benefits.

Bu çalışma, çok yanlı bir ticaret serbestleşmesi girişimi olan Dünya Ticaret Örgütü Tarım Anlaşması’nın hükümleri gereği, anlaşmaya taraf ülkelerin, ticaretin önündeki engelleri belli kurallar doğrultusunda azaltmaları sonucunda oluşması beklenen yeni durumu ve bu yeni durumun Türkiye üzerindeki kısa dönemli etkilerinin bir genel denge analizi çerçevesinde incelendiği bir çalışmadır. Bu amaç için kurulan TRCGE Modeli; tek ülkeli, çok sektörlü, statik bir hesaplanabilir genel denge çerçevesinde kurgulanmıştır. Model; dördü tarımsal, üçü tarım dışı olmak üzere toplam yedi üretici sektör, üç üretim faktörü, bir hanehalkı, devlet ve firmalar ile bir dış dünya arasındaki üretim, bölüşüm, tüketim, tasarruf, yatırım ve dış ticaret ilişkilerini eşanlı denklemler sistemi ile tanımlanmaktadır. Modelin politika deneyleri, Anlaşma hükümleri doğrultusunda Türkiye’nin ulusal yükümlülükleri esas alınarak ve dünya tarımsal ürün fiyatlarındaki en düşük ve en yüksek öngörümleme değerleriyle, hem toplam hem de kısmi etkiler bakımından altı farklı senaryo altında kurgulanmıştır. Bu politika deneyleri sonucunda üretim, bölüşüm, tüketim, tasarruf, yatırım ve dış ticarete ilişkin olarak ulaşılan sektörel düzeydeki bazı temel bulgular, ayrıntılı olarak tablolar halinde verilmektedir.

Industri agro merupakan penyumbang terbesar dalam sektor industri, tetapi kontribusinya terhadap PDB secara konsisten menurun setiap tahunnya. Penurunan ini diduga karena kurangnya ketersediaan bahan baku dan rendahnya produktivitas sektor pertanian. Solusinya, pemerintah akan memberikan insentif kepada pengusaha yang memasok bahan mentah ke dalam negeri, dan memberikan disinsentif berupa bea keluar kepada barang mentah yang diekspor serta meningkatkan produktivitas melalui peningkatan kualitas SDM. Harapannya, kebijakan tersebut dapat mendorong percepatan hilirisasi industri agro.
Terdapat banyak perdebatan soal kebijakan ini, bahkan hasil kebijakan berbagai negara berbeda-beda. Hal ini menjadi menarik bagi penulis untuk menyusuri lebih jauh dampak kebijakan tersebut terhadap perekonomian Indonesia. Temuan penulis, kebijakan pajak ekspor berdampak negatif terhadap pertumbuhan ekonomi. Bila keberhasilan ekonomi nasional hanya dinilai berdasarkan indikator ekonomi makro, maka kebijakan tersebut dinilai tidak pro terhadap pertumbuhan ekonomi nasional, dan memperburuk daya saing ekspor. Sebaliknya, apabila kebijakan ekspor tersebut disertai oleh peningkatan produktivitas sektor hulu dan hilir maka akan berdampak positif pertumbuhan ekonomi dan terjadi hilirisasi industri agro.

This research is the first effort to incorporate Pakistan’s biofuels sector into GTAP Data Base.  We used dataset on production, cost shares and border trades for Pakistan and other major biofuel producing countries to update the latest version 7 of GTAP Data Base. To capture the real structure of biofuels market, we adopted multi-input-multi-output approach for the production and consumption of biofuels in GTAP Data Base. We have placed special attention on the data on Pakistan to produce a reliable simulation tool. Several necessary changes to the standard model structure were also made. Pakistan is not a big biofuels producer; however, the proposed national and global biofuels mandates can seriously change the structure of agriculture market, food security situation and income distribution in Pakistan. The proposed model can be employed to assess the impacts of global and national biofuels policies on Pakistan.

Keywords: CGE model, biofuels, policy, Pakistan.

US-centered Subprime Crisis has equally affected both developed and developing economies of the world. Consequently Turkey’s phenomenal growth experience through seven years came to a halt. By the third quarter of year 2008, this crisis manifested itself destructively by lowering industrial production, crippling the domestic demand, and creating the highest recorded level of unemployment rate. According to IMF projections, Turkey would face a negative growth in 2009. In this lieu, the objective of this thesis is to study and analyze Turkey’s financial and real sector’s vulnerability from a technological point of view with the crisis background. The study uses two econometrical models. We measured Turkey’s Financial vulnerability using the country’s net worth position, capital flows, exchange rate and foreign exchange reserve change, and by testing whether credit boom exists. To follow, a credit crunch test is performed and finally, an econometrical based Disequilibrium Model is applied creating Turkey’s credit supply and demand functions. To analyze the real sector, a Vector Auto regression Model is developed and applied on Turkey’s export and import data taking into account OECD’s technology level classification. Thus, Turkey’s industrial technology phase is identified. These steps are crucial towards formulating a medium and long holistic industrial policy for the country. The Structural Path Analysis that creates structural path among economic accounts giving global, direct and total influence multipliers has been applied to Turkey’s 9-Sector Social Accounting Model for 2006. This contributes to the industrial policy making process. The fourth chapter analyzes as to which policy tool can be effective in overcoming the negative impacts of global crisis, based on a Computable General Equilibrium (CGE) Model. This creates five policy shocks to the model. The Last chapter includes Policy Recommendations based on CGE shock results and a conclusion covering the general findings and limitations of the study. 

Keywords: Global Subprime Crisis, Vulnerability Analysis , Turkey, Social Accounting Matrix, Computable General Equilibrium Model, Disequilibrium Model, CGE, SAM, VAR.

Global change drivers of land-use/cover change (LUCC) like population dynamics, economic development, and climate change are increasingly important to local sustainability studies, and can only be properly analyzed at fine-scales that capture local biophysical and socio-economic conditions. When sufficiently widespread, local feedback to stresses originating from global drivers can have regional, national, and even global impacts. A multiscale, global-to-local-to-global (GLG) framework is thus needed for comprehensive analyses of LUCC and leakage. The number of GLG-LUCC studies has grown substantially over the past years, but no reviews of this literature and their contributions have been completed so far. In fact, the largest body of literature pertains to global-to-local impacts exclusively, whereas research on local feedback to regional, national, and global spheres remain scarce, and are almost solely undertaken within large modeling institutes. As such, those are rarely readily accessible for modification and extension by outside contributors. This review of the recent GLG-LUCC studies calls for more open-source modeling and availability of data, arguing that the latter is the real constraint to more widespread analyses of GLG-LUCC impacts. Progress in this field will require contributions from hundreds of researchers around the world and from a wide variety of disciplines.

This paper investigates the possible impacts of Pakistan-Turkey free trade agreement (Pak-Turk
FTA) on various sectors of the economy in the two countries under four different possible FTA
scenarios by using computable general equilibrium model GTAP. Global Trade Analysis Project
(GTAP) model has been extensively used in FTAs and other Trade related studies to evaluate the
economy-wide potential impact of economic policy reforms. Current study uses the GTAP
database7 which includes; 57 tradable commodities and 113 regions across the world.
Our findings suggest that; Turkey is more beneficial from Free Trade Agreement as compared to
Pakistan .Overall impact of trade liberalization is favorable for both economies, but liberalization
of protected sectors may prove to be unfavorable for the economy in case of Pakistan. And there
is a huge potential for bilateral trade in textile and chemical sector.                 

Keyword: Computable General Equilibrium (CGE) Analysis, Free Trade Agreement (FTA),
Pakistan, and Turkey.
JEL classification: F10, F14, F17