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GTAP Resource #1262

"Linking GTAP to a Single-country CGE Model"
by Horridge, Mark and Joaquim Bento Ferreira-Filho

Single-country CGE models can include sectoral detail or behavioural mechanisms which are absent from the standard GTAP model. We may often wish to combine the advantages of GTAP with the special features of our own single-country model. To achieve this, some have used results from a GTAP simulation to compute external (eg, terms-of-trade) shocks for a second, single-country, simulation. Though useful, this approach has serious limitations; for example, the direction of causation is only one-way: from GTAP to the single-country model.
We describe a method for consistently linking GTAP to a one-country CGE model which overcomes these limitations. Our example links GTAP to an existing CGE model of Brazil which identifies many regions within Brazil. However our technique could be easily adapted to a wide range of other one-country CGE models. In effect, we replace the Brazil part of GTAP with our own model of Brazil. As well as incorporating provincial detail, the Brazil model uses a more recent input-output table than was incorporated into the GTAP data base.The linking process is surprisingly simple and efficient, and ensures that results from the two models are consistent. We compare results for a multi-lateral trade liberalization computed using the integrated GTAP-Brazil model with those computed using the older, 2-step method.

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
2003 Conference Paper
Status: Published
By/In: Presented at the 6th Annual Conference on Global Economic Analysis, The Hague, The Netherlands
Date: 2003
Created: Ferreira-Filho, J. (4/30/2003)
Updated: Bacou, M. (9/27/2003)
Visits: 4,963
- Software and modeling tools
- Calibration and parameter estimation

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