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Question: How can I see "real" (ie, not intra-regional) trade?
View Answer
Answer:The GTPVEW (GTAPVIEW) file produced by GTAPAGG gives headers BX01 BX02 BX03 showing intra-regional trade for aggregated regions. Use Excel to subtract this from total trade. If you have the whole GEMPACK system you can add statements such as:
Formula (all,i,TRAD_COMM)(all,s,REG) REALIMPORTS(i,s) = sum{r,REG,VIWS(i,r,s)} - VIWS(i,s,s); to the TAB files.
Categories: GTAP Model (Standard), RunGTAP
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Question: Does any unaggregated region include intra-regional trade?
View Answer
Answer:The original (87-odd) GTAP regions that are also single countries have no intra-regional trade. But, among the original GTAP regions are composite regions covering several countries. They start with "X", eg, XME - rest of Middle East. There IS intra-regional trade within these composite regions.
Categories: GTAP Data Base
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Question: What are the differences between RunGtap and WinGem?
View Answer
Answer:RunGtap is used by many analysts, even some GEMPACK experts, who find it convenient. It is much more than a teaching tool. RunGTAP is very easy UNLESS you want to modify the GTAP equations. If you want to modify the GTAP equations, you'll need GEMPACK licence and GEMPACK skills. If you want to modify the GTAP equations, Wingem is the easiest route. If you have more advanced GEMPACK skills, you can import your modified equations back into RunGTAP. You need SOME Gempack licence to run GTAP with more than 10 sectors or regions. You need "executable-image" or "source-code" Gempack licence to modify GTAP equations. You need "source-code" Gempack licence to modify GTAP equations AND run the new GTAP with more than 10 sectors or regions.
The two links below give more information.
http://www.gtap.agecon.purdue.edu/products/requirements.asp
http://www.copsmodels.com/gemfeat.htm
Categories: RunGTAP
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Question: I used GTAPAgg to create a 2-region (Sub-Saharan Africa(SSA) vs. ROW) GTAP database. But something is wrong with the bilateral trade flows. SSA total exports are about 100 billion, whereas ROW imports total 6 trillion. The difference must be intra-ROW trade. Why does GTAPAgg not "net out" intra-regional trade?
View Answer
Answer:Intra-regional trade is included in the aggregated data, and this behaviour is "as designed" by Purdue. Most of the imports to ROW will in fact originate from ROW. And there will be a tariff (which you can alter) on ROW imports of ROW produce. The internal ROW-ROW trade distortion is still there in the data. If this intra-regional trade were "netted out" there would be more aggregation bias in the system.
Categories: GTAP Data Base, RunGTAP
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Question: I am reading the GTAP book, but I have a question about the calculation of disposable income or regional income at table 2.5 and 2.8. I don't understand why the disposable income is defined adding taxes and not deducting taxes. As I understand the market prices are the prices that take account of taxes or subsidies and agents prices are the prices that do not take account taxes or subsidies .
View Answer
Answer:What the right hand takes away (through higher commodity prices and lower factor prices) the left hand must return (through the income equation).
Categories: GTAP Model (Standard)
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Question: I just get zeros when I try to look at basedata.hrx files in their original, unaggregated format. I don't know exactly what you mean by this. What ViewHAR shows you should be exactly what is in the file.
View Answer
Answer:The HRX files are encrypted HAR files, ViewHAR will NOT let you properly see their contents. The encryption lets Purdue distribute the whole GTAP data freely so anyone can look at it (see below) but restricts its use to those who paid the licence fee. A modern version of ViewHAR gives a warning if you open an HRX. If your ViewHAR is ageing, download the latest from http://www.copsmodels.com/gpmark9.htm and install the bundle04.exe you will see there. To see the WHOLE data you have two methods: A) download the GVIEW tool from Purdue. This is a stripped down version of ViewHAR which will let you see HRX numbers properly. However, it will not save or copy from an HRX file -- so protecting the Purdue data. B) If you have a full GTAP data licence, simply use GTAPAGG to prepare a "one-to-one" aggregation (very easy). A file BASEDATA.HAR will be produced which is just the decrypted version of BASEDATA.HRX. You can use ViewHAR to look at BASEDATA.HAR as normal. You could modify basedata.har or default.prm and use these modified files as INPUT to GTAPAgg (an important new feature: the "load alternate data"). Strangely, GTAPAgg runs a little slower using the non-encrypted data. For example, if you had a very powerful PC, you could use ALTERTAX to update tariff rates on the disaggregated BASEDATA.HAR. Later you could use GTAPAgg to prepare task-specific aggregations of this updated data.
Categories: GTAP Model (Standard)
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Question: I do not properly understand SHRPM which defined as the share of private household in total output of tradable i. Does SHRPM(i) refer to the privare household's inputs into the production of the output of i or does it refer to the expenditure on i? If the first definition is true, I don't know how to see the household's input in the output of i (I suppose labour only). If the second definition is true: I understand that PCONSHR(i)= SHRPM(i). Is that correct?
View Answer
Answer:Neither one, nor the other! SHRPM(i)is private HH's share in the disposal/sales of total output of i, say food. PCONSHR(i),however, is the share of tradable i (food) in total private household expenditure (or consumption). For the share of labor, it could be either in the value-added (SVAij share of endowment i, say labor, in value-added of sector j) or in total cost of production of j (SENTij share of endowment input i in total costs of sector j) Take a look at the glossary to see how the 2 shares are computed. Both shares may be found in the GTAPView output/SALESDISP header. SHRPM is a Row share, while PCONSHR is a Column share.
Categories: GTAP Model (Standard)
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Question: I am working with the GTAP in some trade policies simulations. I would like to quantify the impact of some trade policies that include conditions on rules of origin. I am aware that, unless I generate a new sector , I will not be able to properly design the shock. However, I think that I can simulate the trade policy implications by an import subsidy plus a tax on domestic consumption and on exports. The problem is that in the standard closure, taxes on domestic and imported purchases by firms, private households and government are not exogenous (tfm, tfd, tpm, tpd, tgm, tgd). My question is how can I exogenize these variables, that is to say which variable should become endogenous instead. Thank you very much for your help.
View Answer
Answer:These taxes ARE exogenous, they are just omitted from the model in the simple version used in RunGTAP in order to make it more manageable in size. You will need to recondense the model to make them available. For this, you will need to use GEMPACK.
Categories: GTAP Model (Standard), RunGTAP
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Question: For some simulations of the WTO we are currently looking a bit closer at the EU sugar market. We are wondering why there is such a heavy duty (251) on sugar beets which are not traded. Wouldn't it make much more sense to have the tariffs on sugar? Why is milk handled differently in this regard (tariffs on raw milk are zero, while milk products have higher tariffs).
View Answer
Answer:Good point. This is somewhat arbitrary, but if sugar beets aren't traded, then I guess the tariff won't matter. Raw milk in GTAP is a pure invention -- we don't even have trade data for that. But for raw sugar there is some trade data. A similar situation exists for rice.
Categories: GTAP Data Base
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Question: IN GTAP4 and GTAP5 labor endoments and labor payments are distinguished accoring to skill level.
Firms' production functions are CES in primary factors. However, there, the distinction seems to be only between capital, labor and land.
I cannot understand whether
1) labor enters as a homogenous factor into the production function, with imperfect substitution with capital and land, or if
2) skilled and unskilled labor are imperfect substituted between themselves, with a substitution elasticity that is the same as that between capital and land.
If the answer is 1), then it should be that skilled and unskilled labor are perfect substitutes. But then, their earnings shuld be the same, whereas they are not in GTAP.
Can you please help me to find an answer to these questions? I read the book, Ch. 18 of the GTAP4 database manual, GTAP Technical Paper n. 11 but I could not fully answer them.
View Answer
Answer:In the standard GTAP model, skilled labor, unskilled labor, capital, land and natlres, are all in the same CES nest with the same substitutability between each other. This elasticity of substitution varies by commodity but a similar value applies to each broad commodity group, i.e. primary agriculture, processed food, extractive sectors, manufacturing, and services. Land is used only by the primary agricultural commodities while NatlRes is used only by the extractive sectors.
Categories: GTAP Model (Standard)
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Question: I am having a confusion about interpretation of ao [j,r] and aoall [j,r] in RunGTAP Tablo file [Version 5]. They are defined as:
Variable (all,j,PROD_COMM)(all,r,REG)
ao(j,r) # output augmenting technical change in sector j of r #;
Variable (all,j,PROD_COMM)(all,r,REG)
aoall(j,r) # output augmenting technical change in sector j of r #;
Variable (all,j,PROD_COMM)
aosec(j) # output tech change of sector j, worldwide #;
Variable (all,r,REG)
aoreg(r) # output tech change in region r #;
Then, there is an equation:
Equation AOWORLD
# sector/region specific average rate of output augmenting tech change #
(all,j,PROD_COMM)(all,r,REG)
ao(j,r) = aosec(j) + aoreg(r) + aoall(j,r);
What is the diffrence between ao[j,r] and aoall[j,r]? and is ao [j,r] endogenous and aoall[j,r] exogenous? -- what does the equation convey intuitively?
View Answer
Answer:We have added a number of equations like this to the new TAB file. It permits you to easily shock all technology by sector, or region, worldwide by the same rate. Therefore, ao(j,r) is normally endogenous and the RHS variables are exogenous. Of course, if you want to shock individual (j,r) pairs, you use aoall(j,r), which is equivalent to shocking ao(j,r) in the previous TAB file.
Categories: GTAP Model (Standard), RunGTAP
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Question: I want to extract the calibrated parameters that allow GTAP to match modeled trade flows to the observable data. In other words, I'm looking for the parameters that define one country's "taste" for another country's goods. Is this data readily available from GTAP, or must it be backed out from other information? If so, how might I do that?
View Answer
Answer:Good question. The answer is that these parameters are imbedded in the import shares. One "advantage" of using the linearized representation of the non-linear model is that the user does not need to go through the "calibration" stage in which these preference parameters are extracted, given information about prices and the elasticity of substitution. They are not needed to solve the model in its linearized form because their economic content is already embodied in the shares.You will have to perform this calculation on the side to obtain them.
For a more complete discussion of this and other aspects of the linearized/levels representation of non-linear CGE models, let me refer you to the following paper:
Hertel, Thomas W., J. Mark Horridge, and Kenneth R. Pearson, 1992. "Mending the Family Tree: A Reconciliation of the Linearization of Levels Schools of Applied General Equilibrium Modeling," Economic Modeling, 9:385-407.
Cheers, Tom
Categories: GTAP Model (Standard)
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Question: I am working on a project with Latin American trade. One problem arises with these countries in particular, that relative price movements in individual commodities (coffee, copper, etc) make it unlikely that the recorded trade in any one year captures the underlying trade pattern particularly well. In other words, any base year is likely to be unstable with respect to some commodity prices. I would like to match the trade figures to a three year average. This appears to require a SAM balancing exercise. The closest analogy I can come up with is using a variant of Altertax to change relative prices (It looks like PW_PM(i,r) is the ratio I'm interested in) rather than tax rates. My questions are: Is this feasible? Is it advisable?
View Answer
Answer:Fluctuating agricultural production shares are a problem for Australian data (we have droughts).
An example of the "typicalization" procedure you suggest is described in the book: Adaptation and Survival in Australian Agriculture, Peter J. Higgs, Oxford
I dont think Altertax will help you much. With Altertax, the world becomes very COBB-DOUGLAS-like, so shares, in general, are preserved. You want to change the shares.
I had an idea about this.
The idea involves constructing a special TAB file as follows: For each flow data item, a corresponding %change variable, which is used to update that flow.
Equations which relate flow variables; for example, wages used in a sector follow value of output of that sector The constant of proportionality would be an exogenous SHIFT variable.
Accounting equations as in GTAP so that change in flows add up.
Equations defining summary variables, eg: total rice exports of Thailand
Then, to create a database with larger Thai rice exports, you would exogenize and shock the [Thai rice export] variable, whilst endogenizing some matching shift term (eg, a taste change term which increased each users value share of Thai rice in all rice usage).
The updated data base would satisfy accounting restrictions. The procedure is similar in numerical effect to a RAS or FIT procedure but very flexible with regard to instruments and targets. It works on values only, not on prices or quantities separately.
Recently, I did a similar thing for an older single country indonesian database.
In that case I adapted an existing model. I used a special closure: factor prices were exogenous, factor usage endogenous. In my simulations, prices did not change so substitution did not happen. I exogenized and shocked the chief expenditure side components of GDP [C I G X M]. Endogenous were matching shift variables. The result was a database which matched recent National Accounts data, whilst maintaining as nearly as possible the share structure of the original data.
I believe a framework of the type described above could be practicable and useful for GTAP.
Maybe someone will construct it one day. In fact it would not surpise me to learn that someone else already has !
Categories: GTAP Model (Standard)
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Question: I have just encountered an arithmetic problem when running a simulation with GTAP. Since the shocks are pretty large (70-190%), I have to split the shocks into several subintervals, with "steps = 2 4 6". The simulation runs well for the first 3 subintervals, but then stops in the 4th subinterval when doing extrapolation because of "arithmetic overflow".
I am using source-code GEMPACK release 7.0. I also checked the manual (GPD-3, page 15-118), which acknowledges this kind of problem, but does not offer a solution to it.
Can anyone give me some advice?
Thanks in advance.
View Answer
Answer:The most common source of this error occurs when you have set ESUBVA = 0 in the capital goods sector (cgds). Even though this sector does not have any value-added, GEMPACK can be misled into believing there is a computational problem when it cannot equate the supply and demand for specific factors in this sector. If your current setting is indeed zero, please set it equal to something else (1.0 is a good choice) and see if this fixes the problem.
Best of luck,
Tom Hertel
Categories: GTAP Model (Standard), RunGTAP
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Question: I have just encountered an arithmetic problem when running a simulation with GTAP. Since the shocks are pretty large (70-190%), I have to split the shocks into several subintervals, with "steps = 2 4 6". The simulation runs well for the first 3 subintervals, but then stops in the 4th subinterval when doing extrapolation because of "arithmetic overflow". I am using source-code GEMPACK release 7.0. I also checked the manual (GPD-3, page 15-118), which acknowledges this kind of problem, but does not offer a solution to it. Can anyone give me some advice?
View Answer
Answer:The most common source of this error occurs when you have set ESUBVA = 0 in the capital goods sector (cgds). Even though this sector does not have any value-added, GEMPACK can be misled into believing there is a computational problem when it cannot equate the supply and demand for specific factors in this sector. If your current setting is indeed zero, please set it equal to something else (1.0 is a good choice) and see if this fixes the problem.
Categories: GTAP Model (Standard), RunGTAP
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