General Equilibrium Models: A Computable General Equilibrium Model to Analyze the Effects of an Extended Drought on Economic Sectors in México

  • Alejandra Elizondo
  • María Eugenia IbarraránEmail author
  • Roy Boyd


The agricultural sector in Mexico is small in terms of its relative contribution to GDP, but significant in terms of its total employment. Overall, the primary sector, which includes agriculture, livestock and forestry accounts for only 4% of GDP but employs roughly 15% of the labor force. The agricultural sector is highly vulnerable to climate change due to the severe impact which higher temperatures and modifications in precipitation patterns can have on water availability and plant growth. Conversely, omissions from the agricultural sector can also contribute to climate change. The pumping of water for agricultural purposes, for example, is currently subsidized through low electricity prices, leading to both the overuse of electricity, (produced by fossil fuels) and the depletion of groundwater sources. Consequently, policies such as ethanol production have been promoted in Mexico with the stated goal of climate change mitigation.


  1. Ballard CL, Fullerton D, Shoven JB, Whalley J (1985) A general equilibrium model for tax policy evaluation. University of Chicago Press, ChicagoCrossRefGoogle Scholar
  2. Banse M, van Meijl H, Tabeau A, Woltjer G (2008) Will EU biofuel policies affect global agricultural markets? Eur Rev Agric Econ 35(2):117–141CrossRefGoogle Scholar
  3. Birur DK, Hertel TW, Tyner WE (2008) Impact of biofuel production on world agricultural markets: a computable general equilibrium analysis. GTAP working paper no. 53. Center for Global Trade Analysis, Purdue University, West Lafayette, USAGoogle Scholar
  4. Dixon PB, Osborne S, Rimmer MT (2007) The economy-wide effects in the United States of replacing crude petroleum with biomass. Energy and Environ 18(6):709–722CrossRefGoogle Scholar
  5. Elizondo A, Boyd RG (2017) Economic impact of ethanol promotion in Mexico: a general equilibrium analysis. Energy Policy 101:293–301CrossRefGoogle Scholar
  6. Guilhoto JJM, Sesso Filho UA (2005) Estimação da Matriz Insumo-Produto a Partir de Dados Preliminares das Contas Nacionais. Economia Aplicada 9(2):277–299Google Scholar
  7. Guilhoto JJM, Sesso Filho UA (2010) Estimação da Matriz Insumo-Produto Utilizando Dados Preliminares das Contas Nacionais: Aplicação e Análise de Indicadores Econômicos para o Brasil em 2005. Economia & Tecnologia UFPR/TECPAR 6(23): Out./DezGoogle Scholar
  8. Gurgel AC, Reilly JM, Paltsev S (2008) Potential land use implications of a global biofuels industry. MIT joint program on the science and policy of global change, Report 155. Massachusetts Institute of Technology, Cambridge, MassachusettsGoogle Scholar
  9. Hertel T, Tsigas M (2002) “Primary factor shares,” section 18C. In: Dimaranan BV, McDougall RA (eds) Global trade, assistance, and production: the GTAP5 Data Base, Center for Global Trade Analysis, Purdue UniversityGoogle Scholar
  10. Hertel TW, Tyler WE, Birur BK (2008) Biofuels for all? Understanding the global impacts of Multinational mandates. Working Paper 51, GTAP, Purdue University, IndianaGoogle Scholar
  11. INEGI (2003) Sistema de Cuentas Nacionales Matriz de Insumo Producto 2003. MexicoGoogle Scholar
  12. INEGI (2010) National survey of Mexican household income and expenditure. MexicoGoogle Scholar
  13. Kretschmer B, Peterson S, Ignaciuk A (2008) Integrating biofuels into the DART model. Kiel Working Papers, 1472. Kiel Institute for the World EconomyGoogle Scholar
  14. Martínez SH, van Eijck J, da Cunha MP, Guilhoto JJM, Walter A, Faaij A (2013) Analysis of socio-econmic imacts of sustainable sugarcane-ethanol production by means of inter-regional input-output analysis: demonstrated from Northeast Brazil. Renew Sustain Energy Rev 28:290–316CrossRefGoogle Scholar
  15. Reilly J, Paltsev S (2007) Biomass energy and competition for land. Report no. 145, MIT Joint Program on the Science and Policy of Global Change, MassachusettsGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2018

Authors and Affiliations

  • Alejandra Elizondo
    • 1
  • María Eugenia Ibarrarán
    • 2
    Email author
  • Roy Boyd
    • 3
  1. 1.CONACYT-CIDE, Centro de Investigación y Docencia EconómicasMexico CityMexico
  2. 2.Department of EconomicsUniversidad Iberoamericana PueblaPueblaMexico
  3. 3.Department of EconomicsOhio UniversityOhioUSA

Personalised recommendations