Building and Running General Equilibrium Models in EViews
A crucial step in policy analysis involves computing consequences of policy actions. The author shows how to implement numerically a general equilibrium model in EViews. Computable general equilibrium models are now commonly used in both industrial...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/01/3169681/building-running-general-equilibrium-models-eviews-building-running-general-equilibrium-models-eviews http://hdl.handle.net/10986/15621 |
| Summary: | A crucial step in policy analysis
involves computing consequences of policy actions. The
author shows how to implement numerically a general
equilibrium model in EViews. Computable general equilibrium
models are now commonly used in both industrial and
developing countries to assess the impact of external shocks
or economic policies on the structure of the economy or the
distribution of welfare. The current version of EViews
offers a set of tools for building and solving simulation
models in general. The same tools make it possible to
conduct policy analysis within a general equilibrium
framework. Based on the generalized Salter-Swan framework
and macroeconomic data for Indonesia, the author shows how
to process a social accounting matrix, specify and calibrate
the model, and run simulations. The results replicate
welfare and structural effects of shocks and policies
consistent with the underlying conceptual framework. They
also reveal the key role played by structural parameters,
such as the elasticity of export transformation and that of
import substitution, in determining the extent of structural
adjustment to shocks and the relevance of the policy response. |
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