Course Objectives and Expectations
The successful participant will demonstrate fluency with the GTAP Model code and data base by designing an economic policy experiment and communicating analysis to the course cohort and teaching team. The learning objectives fostered by the distribution of course activities reflect the ultimate goal and include:
- introducing participants to the standardized framework (GTAP Model, v7) for conducting global policy analysis in an applied general equilibrium setting
- providing participants with hands-on training with software that has been tailored to instruction and collaboration in economic analysis with minimal software manipulation overhead
- delivering participants an opportunity to interact with economists working on global trade and resource use issues, and provide an efficient entry point to the international network of AGE modelers and policy analysts using GTAP data and models
Course Structure
The GTAP Short Course is an intensive training course in the economics of global policy analysis delivered by a team of GTAP specialists in data, model construction, and policy analysts. The course is delivered in three, online phases. Note that course phases are not offered independently and the precise plan of study, with meeting times (when applicable) will be provided to those accepted into the course. When live meeting times are scheduled, differing time zones will be taken into consideration to ensure as fair as possible meeting times for all.
Phase 1 consists of asynchronous, online learning, during which participants should expect to spend approximately 4 hours/week on the course. Phase 1 aims to give students practical experience using the software environment for solving GTAP models while reviewing economic components of the model in a partial setting (e.g., production behavior or market equilibrium, but no international trade). Students will also learn the construction of, and analysis with a global economy model with bilateral trade and relevant policy instruments.
- Phase 1 - Prep Week
- Course software installation and setup
- Module 1 - "Introduction to GTAP's Software Environment"
- Module Objectives - Students gain extensive experience with the RunGTAP software and GEMPACK programs used for solving the GTAP Model. Upon completion of this module students will:
- know the layout and functions of RunGTAP 'tabs'
- be able to read the GTAP Model in its native TABLO coded environment
- have a functional understanding of the GTAP Data Base and its structure for modeling
- be able to implement a simple shock in the GTAP Model environment
- Topics Covered:
- The RunGTAP Interface
- Understanding Model Implementation in the TABLO Language
- The GTAP Data Base
- Simulation in GTAP
- Module 2 – "Production and Supply in GTAP"
- Module Objectives – Students begin their study of GTAP behavioral assumptions in this module. Upon completion of this module students will:
- understand the theory of production as implemented by GTAP
- gain facility with the nested CES production structure used in the model
- examine the flows and shares specific to the production side of the model
- have completed their first simulation and analysis of a GTAP policy experiment
- Topics Covered:
- Theory of production
- Operationalizing production and supply in GTAP
- Production data
- Production application
- Module 3 – "Consumer Demand in GTAP"
- Module Objectives – Students move from the production to end-user side of the model in this module. Successful completion of the module will give students experience with:
- treatments of final demand in general equilibrium and the specific assumptions made in GTAP
- the GTAP "Regional Household" and the empirical form of public and private demands
- the data flows and parametric assumptions that drive demand behavior in GTAP
- examining simulation outputs including percentage change variables and updated data
- Topics Covered:
- Consumer theory
- Operationalizing final demands in GTAP
- Demand data
- Demand application
- Module 4 – "Prices and Policy Instruments"
- Module Objectives – In this module, we connect the demand and supply sides of regional economies by examining the price system in GTAP. After finishing this module students will:
- know the major policy instruments on transaction in GTAP
- understand how policy shocks transmit to the price system
- be able to identify the data components that define base equilibrium policy levels
- examine simulation outputs from multiple interacting policy instruments
- Topics Covered:
- GTAP policy wedges
- The GTAP price system
- Policy data, evaluating flows at different 'prices'
- Multiple policy shocks application
- Module 5 – "Balance and Equilibrium Conditions in GTAP"
- Module Objectives – In this module, we consider the equilibrium conditions pertinent to the single-region setting. The module training will introduce students to:
- the accounting theory underlying GTAP
- navigation of market clearing equations in GTAP v7
- the accounting basis of the GTAP data matrix
- simulation concepts for linearized economic models
- Topics Covered:
- Theory of Markets
- Equilibrium Conditions in the GTAP
- Market Clearing Data
- Revisiting Linearization
- Module 6 – “Introducing the GTAP Open Economy”
- Module Objectives – In this module, we expand our view of the GTAP Model to the open economy setting by returning to the equilibrium conditions previously studied in a single region setting and exploring the additions required to model trade linkages between regions. In this module students will gain knowledge of the:
- GTAP multi-region economy and its key linkages
- fundamental accounting relationships of the multi-region economy in GTAP
- expanded price system required for the multi-region setting
- construction and balance of the core GTAP data and tools for creating aggregated databases from core GTAP data
- Topics Covered:
- Overview of GTAP CGE Framework
- Accounting and Market Clearing in Open Economy GTAP
- Price Linkage Relationships in Open Economy GTAP
- GTAP Data Base I
- Lab – Using RunGTAP Better
- Module 7 – “Advanced Theory and Implementation in GTAP”
- Module Objectives – In this module we focus on advanced treatment of underlying behavioral theory of supply and demand side of the model including the explicit treatment of demand for goods by source (domestic or specific bilateral trading partner). This extends directly into incorporation of demands by source (domestic vs foreign) in the GTAP version of the Armington import demand structure. With the full complement of behavior relations in hand, we are prepared to explore the quantitative regional welfare calculation in GTAP – including the partitioning of the measure of EV into its specific contributions. At the close of the module students will have knowledge of:
- GTAP’s production structure, including the handling of technical change and foreign sourcing of inputs
- GTAP’s final demand structure, including the calibration of CDE demand parameters from literature estimates of price and income elasticities
- GTAP’s handling of substitution in trade and mechanisms for modeling the price transmission effects of trade cost margins
- the equivalent variation measure and tracking the contributions to regional welfare from its efficiency and terms of trade components
- Topics Covered:
- Behavioral Equations for Production
- Final Demand
- Trade and Transport Behavior
- Welfare Decomposition with the GTAP Model
- Phase 1 - Wrap-up Week
- During the final week of phase 1, participants will have a chance to catch up on any incomplete coursework and pose any remaining questions pertaining to the material covered before moving onto phase 2.
Phase 2 consists of live instruction that aims to give students experiential training with the GTAP Model that incorporates understanding of the key behavioral assumptions, equilibrium structure, and policy levers that are specified in the GTAP Model. The two days of instruction will be taught live online as a series of lectures and laboratories. During lab time, students will have the opportunity to follow an instructor’s demonstration with time dedicated to student practice with an instructor monitoring the group for questions and other assistance.
- Topics Covered:
- Interpreting Model Results
- Closure Rules in Multi-region Economy Models
- Global Investment Handling
- GE Mechanisms and Real Exchange Rates
Phase 3 is the culmination of the course, giving students the opportunity to prepare their own global economy investigation by working in small groups, while checking in with instructors to meet predefined milestones to replicate prior work done with the GTAP Model and data base. It is in this third, capstone phase of the course, where students gain the experience in scenario design, model tools, and analysis techniques that will prepare them to become contributors to global analysis in the GTAP Network of researchers. Select research areas for small group projects may include, but are not limited to the following. Final offerings are ultimately determined by the instruction team, current research trends and developments, and formed by reviewing student capabilities and requests. The curriculum and instruction team work to ensure that the core learning objectives and experience remain identical regardless of which extension replication a student completes. The replication exercise is not a jump-start on a specific research agenda – it is a capstone of phases 1 and 2 that culminates in a final deliverable presentation. Students are provided access to all replication and extension materials after the course ends. It is anticipated these materials will be key resources for students in continuing the type of self-directed study necessary to continue to hone skills and advance research skills with GTAP. On the final day of the course, small groups will deliver their presentation live to the cohort and instruction team.
- Sample research topics for small group projects
- Commodity trade and regional free trade agreements
- International farm and food policy measures
- Energy policy and international policy measures
- Environmental and land use policy assessments in a global setting
- Migration and labor