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GTAP Resources: Resource Display

GTAP Resource #4635

"A generic approach to investment allocation in recursively dynamic CGE models"
by Pant, Hom

It is a common practice in recursively dynamic CGE models to maintain static expectations. Consequently, investors take current rates of return as expected future rates of return. The vexing problem with this approach is that no matter how we allocate investments across sectors and regions in the current period, it is not possible to bring the expected rates of return to equality once the equilibrium is displaced. To deal with this problem all recursively dynamic CGE models have resorted to some complex mechanisms to allocate investments across sectors and regions. By drawing on the inverse relationship between the future capital stock and its marginal productivity, this paper establishes an inverse relationship between the expected future rates of return and current investment levels and this approach has been applied to the static GTAP model (version 6.2). By doing so this paper provides an alternative to the GTAP-Dyn model.

Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2015
Created: Pant, H. (4/9/2015)
Updated: Douglas, J. (11/22/2023)
Visits: 2,124
- Dynamic modeling

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Public Access
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  File format Model application with v7 3x3 database  (1.9 MB)   Replicated: 0 time(s)

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Special Instructions
Users need to have access to the RunDynam software to install and run the dynamic version of the GTAP model contained in the zip archive.

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