GTAP Book 3x3 aggregation US-EU-ROW
Used as a "simple numerical example" in Chapter 2 of "Global Trade Analysis: Modeling and Applications", Thomas W. Hertel(editor).
See also "Hands-on Document to Introduce GEMPACK and GTAP" in GTAP's web site for more information about this experiments and how to use them to learn about GEMPACK and GTAP.
****************************************************************************

I. SUMMARY

 This aggregation is used to simulate a 10% cut in the power of  the ad valorem equivalent tariff on US food exports to the EU. The same experiment is run using two different solution methods: the linear Johansen method and the non-linear Gragg method (experiments 1 and 2 respectively). Experiment 3 simulates a CAP reform removing output subsidies, export subsidies and import taxes on food and farm products in  the European Union.

II. REGIONS AND COMMODITIES

Regions:
USA	U.S.
EU	European Union
ROW	Rest of the World

Sectors:
food	Food and agricultural products
mnfcs	Manufactures and mining
svces	Services

III. EXPERIMENT FILES: SHOCKS, CLOSURES AND SOLUTION METHOD

To replicate the experiments with RunGTAP, go to "SOLVE" in RunGTAP, click on "Load Experiment" and choose one of the experiments EXP1 to EXP5. This will automatically load the shocks, closure, parameter file and solution method for the experiment of interest. Note that for each of these experiments, there exist two alternative closures:

-The "book closure" permits users to replicate the results from the GTAP book. In particular, there is a unique price of savings, worldwide and this is the numeraire. Also, the expenditure shares in final demand for each regional hhld are constant. 

-The standard GE closure with the new TAB file permits psave to vary by region and selects pfactwld as the numeraire. It also implements the new final demand theory, as documented in McDougall's GTAP technical paper #20.

EXP1 Simulates a 10% cut in the power of the ad valorem equivalent tariff on US food exports to the EU using Johansen solution method and parameter RORDELTA = 0. 
 
EXP2 Simulates the same experiment as in Experiment 1 but with non linear solution method (Gragg 2 4 6) and RORDELTA = 0.

EXP3 Simulates a 10% cut in the power of the ad valorem equivalent tariff on US food exports to the EU using Johansen solution method and parameter RORDELTA = 1.
 
EXP4 CAP reform simulation, through the removal of farm and food output subsidies, export subsidies and import taxes in the European Union and RORDELTA = 0.

SOLUTION METHODS:
Johansen is used for some experiments (for teaching purposes only) but Gragg 2 4 6 with automatic accuracy should be the default for any serious policy analysis.

