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GTAP Resource #3255

"Does structure matter? Exploring the impact of model structure on model results"
by Kuiper, Marijke and Andrzej Tabeau


Abstract
At times policymakers or researchers from different fields object to CGE models for being black boxes. At the same time especially policy-makers tend to object to simplifications of reality, and their own desired policies in particular. Ironically the black-box properties of CGE models stems from their economy-wide coverage where everything depends on everything else. In other words, the lack of simplification of economy-wide relationships creates interdependencies that make interpretation of model results at times seem like black art. Understanding the mechanism driving model results is key to providing policy-makers with a more in-depth understanding of how their proposed policies may change behavior and thus the economy. Adding to the complexity of CGE models are the numerous extensions made to the basic CGE model exemplified by the standard GTAP model. These extensions aim at better capturing features of the economy for specific research questions. When developing a model over time eventually it is no longer obvious how the extensions of the model affect results and whether there are interactions between extensions. To our knowledge no systematic comparisons of the impact of different model extensions and their interactions on model results are available. The objective of this paper is to provide such an analysis of sensitivity of model results to model structure by analyzing the impact of nested-CES production structure on model results. For this analysis we use a new version of the LEITAP model (a GTAP-based CGE model developed at the LEI). This version of the LEITAP model has been developed to facilitate changes in model structure to address specific research questions. Based on a set of parameters capturing all available model choices a sequence of programs generates the appropriate data and model structure. This program-based approach makes the choices made in setting-up the model transparent, a necessity in the team-based analyses performed at LEI.


Resource Details (Export Citation) GTAP Keywords
Category: 2010 Conference Paper
Status: Published
By/In: Presented at the 13th Annual Conference on Global Economic Analysis, Penang, Malaysia
Date: 2010
Version: Draf June 2010
Created: Kuiper, M. (4/13/2010)
Updated: Kuiper, M. (6/22/2010)
Visits: 1,588
- Domestic policy analysis
- Agricultural policies
- Technological change
- Software
- Calibration and parameter estimation


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