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GTAP Resources: Frequently Asked Question Details

Subject: FAQ

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 #
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?


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.


Date Added: 3/22/2001