The Integrated CGE Model Construction

  • Xiangzheng Deng
  • Yi Wang
  • Feng Wu
  • Tao Zhang
  • Zhihui Li
Chapter
Part of the SpringerBriefs in Environmental Science book series (BRIEFSENVIRONMENTAL)

Abstract

CGE models are simplified representations of entire economies. One approach to constructing a CGE model is through the notion of the circular flow of an economy. Figure 4.1 presents the core of the conceptualized circular flow in a CGE model, adapted from Ghadimi (2007). First, we start with the producers. A CGE model contains multiple producing sectors such as the agricultural sector, the manufacturing sector, the trade sector, the services sector and the utilities sector. The number of sectors (and model complexity) could vary from only two sectors to hundreds sectors, depending on the level of aggregation of industry activity needed for a particular policy analysis. An integrated CGE model often includes a water utility sector that captures, stores, treats and delivers water for its customers. Each industry sector is represented in the model in aggregate over all firms and therefore with a specific production function.

Keywords

Income Gasoline 

Reference

  1. Ghadimi, H. (2007). CGE Modeling and Applications: A Short Course In. Morgantown, West Virginia. http://rri.wvu.edu/CGECourse/index.htm

Copyright information

© The Author(s) 2014

Authors and Affiliations

  • Xiangzheng Deng
    • 1
  • Yi Wang
    • 2
  • Feng Wu
    • 3
  • Tao Zhang
    • 1
  • Zhihui Li
    • 1
    • 4
  1. 1.Institute of Geographic Sciences and Natural Resources ResearchChinese Academy of SciencesBeijingChina
  2. 2.Institute of Policy and ManagementChinese Academy of SciencesBeijingChina
  3. 3.State Key Laboratory of Water Environment Simulation, School of EnvironmentBeijing Normal UniversityBeijingChina
  4. 4.University of Chinese Academy of SciencesBeijingChina

Personalised recommendations