CGE Applications in Development Economics

January 1, 2011

This paper begins with an informal history of developing country computable general equilibrium models.

Then we move on to specification and closure, and finally describes a few models with financial extensions. Sectoral detail is central to CGE analysis, but after an initial sketch of an n-sector system most of the discussion focuses on the models' "closures" or patterns of macroeconomic causality, because they strongly influence their sectoral results. Particular attention is paid to the ways in which international trade and financial flows are fitted into applied models.

Author: Lance Taylor
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