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At the beginning of 2020, the world experienced the COVID-19 pandemic in which several countries all around the world closed their borders and established isolation measures. These types of measures, in line with the spread of the virus, mainly affected those sectors where face-to-face interaction and mobility were central, as it was the case in the tourism sector. As a response to this crisis, some countries implemented policies to promote tourism within the same country. In this paper, we study the case of a tourist program applied in Argentina and estimate its effects on the tourism sector and the overall economy with a general equilibrium perspective addressing its implications in a context where government's budget constraints are binding. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study was to show how pro-gender public policies in the agricultural sectors can contribute to the reduction of gender inequalities in the labour market and the diversification of the Congolese economy. Design/methodology/approach: Computable general equilibrium model that has been adapted to the Congolese economy from the Democratic Republic of the Congo (DRC)'s SAM. Findings: The results reveal that policies of increasing women's land allocation and government cash transfers to rural female households contribute to the reduction of inequalities in the labour market. However, only the policy of increasing women's land allocation improves economic diversification. Research limitations/implications: The implementation of the policy of government cash transfers to rural women's households comes at a cost to the government. Future studies to look at the most effective mode of financing for this policy. Moreover, the policy of increasing women's land allocation is feasible in the DRC as there is a lot of unused arable land available. Social implications: In Pillar 1 of the National Strategic Development Plan (PNSD) on Economic Diversification and Transformation, the policy of increasing land allocation to women could be added to the objectives related to strengthening the contribution of agriculture to economic growth and employment creation. In Pillar 3 of the PNSD on Social Development and Human Resource Development, the policy of increasing land allocation to women as well as the policy of increasing government transfers to female rural households could be added to the objectives related to the promotion of employment of youth, women and vulnerable groups. Originality/value: To the best of the authors' knowledge, this is the first study of its kind for the DRC, which highlights the impact of pro-gender policies on women's employment, particularly in the agricultural sectors and in the diversification of the Congolese economy. This study contributes to policy orientation in DRC. The two policies (increasing land allocation to women and cash transfers to rural women) analysed in this study were chosen in light of the DRC's National Strategic Plan, the first phase of which focuses on promoting employment for vulnerable groups and economic diversification through the development of agricultural sectors. [ABSTRACT FROM AUTHOR]

This paper offers a quantitative assessment of the impacts of the COVID-19 pandemic-induced lockdown and government fiscal plan, containing 'green' elements on the economy and the environment of South Africa. The analysis uses a dynamic computable general equilibrium model operationalised using a social accounting matrix coupled with a greenhouse gas balance and emissions data. We find that while the economy is harshly impacted by the pandemic in the short term, the government fiscal package ameliorates and cushions the negative effects on poor households. Importantly, an adaptation of the fiscal package towards a 'greener' policy achieves the same economic outcome and reduces unemployment. Carbon dioxide emissions decrease in the short run due to economic slowdown. This improvement persists until 2030. These results can be used as decision support for policy makers on how to orient the post COVID-19 policies to be pro-poor and pro-environment, and thus, 'build back better and fairer'. [ABSTRACT FROM AUTHOR]

South Africa has a competitive and viable food production sector which enables the country to be a consistent net exporter of agricultural products. Lately, the business and labour organisations have raised concerns that the government's intention to implement the carbon tax policy will affect the food supply, subsequently exacerbating the unemployment and food insecurity in the country. Carbon tax is one of the policy tools to be implemented in order to reduce the growing greenhouse gas emissions thus helping the government meets its Paris Agreement commitments. South Africa's National Treasury released a second draft of the carbon tax bill in 2017, which takes into account the concerns raised by different organisations. In this paper, we evaluate the potential impact of the carbon tax policy on agriculture, food and other sectors using a dynamic computable general equilibrium model. The results show that the carbon tax is an effective policy tool to mitigate emissions, as they decline by 33% relative to the baseline by 2035. This also leads to a welfare loss of R98.326 billion as the country transforms into a green economy. The carbon-intensive sectors like transport, steel and coal-generated electricity experiences significant output decline. However, the agriculture and food sectors show improvements in terms of jobs and production when the carbon tax is implemented. The positive effects on these two sectors are greatly reduced if tax exemptions provided to the agricultural sector are removed and the tax revenue is not recycled in the form of production subsidy to industries. [ABSTRACT FROM AUTHOR]

This paper analyzes spatial influences of national economic growth on trade and the emission of PM2.5 for three Northeast Asia countries—China, Japan, and Korea. An Air pollution-Multinational Computable General Equilibrium model is developed to integrate two environmental modules for PM2.5 emissions and premature mortality with a multinational economic model. Emission flows of PM2.5 are examined in terms of production-based emissions by the producer in the supply process and consumption-based emissions by the consumer in the demand process. The paper shows that capital stock accumulation in China has positive effects on increases in total trades as well as production-based and consumption-based emissions of PM2.5 among three countries. In contrast with these impacts, the supply growth of Japan and Korea through the capital accumulation could reduce total amounts of emissions of PM2.5 pollutants in the area because of increasing their outputs with low-emission technologies and substituting for Chinese imports. However, their increases for imports would cause premature deaths in China to rise, so two countries need to share economic costs for mitigating the emission of the PM2.5 in China. [ABSTRACT FROM AUTHOR]

In this study, we estimate the cost of PM2.5 and O3 pollution in China and explore how it differs by province. For the analysis, we extend the China Regional Energy Model—a computable general equilibrium model of the Chinese economy—to explicitly represent the pollution-health linkage within a larger economic system. Our results show that health damage from air pollution in China is substantially large. For each year between 2010 and 2030, China's welfare loss from excess pollution is estimated to be 3.2–5.1% of the baseline level when welfare is measured as the sum of consumption and leisure. The PM2.5 share of the costs was > 13 times as large as the O3 share, and premature deaths from chronic exposure to PM2.5 were the single most important health endpoint, accounting for ≤ 56% of the total costs. Cross-regional heterogeneity is substantial, and populous and wealthy Eastern China is subject to particularly large health damage. When the size of provincial economies is controlled for, however, the dominance of the eastern region is less obvious and several inland provinces (e.g., Henan, Shanxi, and Chongqing) also suffer high pollution-health costs, due to low air quality and fast productivity growth. Finally, broader economic loss from inefficient resource allocation and its cumulative effects, which is often neglected in static analysis, accounts for > 29% of the total costs. Overlooking this cost component will, in particular, lead to substantial underestimation for China's central and western regions, whose economies are growing fast. [ABSTRACT FROM AUTHOR]

The increasing constraints on crude oil resources contribute to the emergence of liquid biofuels as an alternative for road transport fuels. The European Union (EU) Parliament called for a 7% limit on crop-based biofuels by 2030 and proposed increasing the incorporation target for advanced biofuels, within the proposals under discussion in relation to the post-2020 EU Renewable Energy Directive (RED II) by 2021–2030. The main objective of this work is to assess the economic impacts of the EU Parliament's decision concerning first generation biofuels. We also determine the conditions under which advanced biofuels could become available by examining the evolution of oil prices and public subsidies. We employ a recursive dynamic computable general equilibrium (CGE) model calibrated on the French economy. Advanced biofuels are modelled as latent technology and we include biofuel by-products. Our simulations provide guidelines for public decision-makers to design alternative fiscal policies to support biofuels in a context of regulatory uncertainty. [ABSTRACT FROM AUTHOR]

While the production of biofuels has expanded in recent years, findings in the literature on its impact on economic growth and development remain contradictory. This paper presents a meta-analysis of computable general equilibrium (CGE) studies published between 2006 and 2017 on the effect of biofuel production on economic development worldwide. Using 30 CGE studies, we found that biofuel-supportive policies generated significant impacts on GDP and household incomes. CGE studies included in our database reported an average 0.25 percentage point increase in GDP and a 0.49 percentage point increase in household incomes. We also found that results were driven by several key features of the CGE studies included in our database. We investigated features such as biofuel type, geographic area, and characteristics of the CGE models employed. We found that biofuel expansion has heterogeneous effects in developed versus emerging countries. Simulations on longer time periods and in multi-country studies led to results that indicate higher impacts of biofuel expansion on GDP growth and household incomes. Moreover, simulations with an increase in agricultural productivity indicate positive welfare impact gains, unlike simulations with land expansion. Lastly, we found that biodiesel development leads to higher welfare impact gains than that of bioethanol. [ABSTRACT FROM AUTHOR]

In response to mounting international pressure to reform the ring-fenced elements of its tax system, the Swiss government has put forward a comprehensive tax reform package. The proposal comprises the introduction of a license box, a substantial reduction in cantonal profit tax rates, and an allowance for excess corporate equity. We apply a computable general equilibrium model to quantify the economic effects of this reform. Our results reveal that the license box, combined with the reduction in the cantonal profit taxes, limits the outflow of the tax base of those companies that benefit from the current preferential tax treatment. The reduction in cantonal profit taxes and the fact that regularly taxed companies additionally benefit from the license box render the reform package costly, such that tax revenues might well decline after the reform. [ABSTRACT FROM AUTHOR]

Pricing carbon is a widely used policy instrument for climate change mitigation. Quantitative analysis of carbon pricing are mainly conducted at the regional and national level, rarely at the city level due to data availability. As a representative of coastal megacities that are vulnerable to both climate change and climate policies, Singapore has announced to impose carbon tax on large direct emitters as a complementary mitigation option to technical measures. A city-level Computable General Equilibrium (CGE) model is developed to simulate potential impacts of carbon pricing on the city, including paying border-carbon-adjustment (BCA) on exports or introducing a domestic carbon tax. Different sector coverages and carbon tax revenue recycling schemes are investigated for domestic carbon tax. The simulation results show that a domestic carbon tax is a more cost-effective option than paying BCA. Given an identical carbon price at S$10/t-CO 2 , GDP, total exports and household consumption would decline less and average abatement cost is much smaller in the carbon tax scenarios compared to the BCA scenario. In terms of absolute emissions reduction, a carbon tax that covers energy, manufacturing and land transport sectors would be preferred, making emissions around 2.7% lower than 2010 baseline level. [ABSTRACT FROM AUTHOR]

The Paris Agreement reached during the COP21 in December 2015 represents a timid step towards burden sharing in emission mitigation involving all countries. However, given the heterogeneity of countries and their relative differences in vulnerability to climate change damage and in mitigation costs, compensating schemes are required to reach an effective agreement. This paper investigates the role of the Green Climate Fund (GCF) as a potential compensating measure for both adaptation and mitigation actions under a global climate regime. A dynamic climate-economy computable general equilibrium model (GDynEP) is developed by including both a monetary valuation of climate change damage costs and two alternative methods to determine the allocation of GCF resources among receiving countries and between adaptation and mitigation contributions. Results show that, despite the high costs associated with the implementation of mitigation actions, most developing countries would face even higher costs in case of inaction. Furthermore, the preference of a country for an allocation method is strongly influenced by its characteristics and needs. Consequently, a main policy conclusion is to design country-specific sharing rules for GCF in order to maximize country participation in a global agreement. [ABSTRACT FROM AUTHOR]

The transatlantic trade and investment partnership (TTIP) is a comprehensive preferential trade agreement that is expected to significantly increase EU-US bilateral trade and investments. Negotiations are ongoing, so we use a scenario analysis to estimate the potential effects of TTIP under likely negotiated outcomes. In our main scenario, we assume a final trade deal where current tariffs are eliminated and non-tariff barriers are significantly reduced. We simulate the potential economic effects of TTIP using a CGE model. We find that US-Dutch bilateral trade doubles and this is translated into a positive but moderate effect on Dutch income of 1.7%. [ABSTRACT FROM AUTHOR]

This article provides additional evidence that factor contents of different consumers’ consumption bundles computed from multiple households closed Computable General Equilibrium (CGE) models are approximately proportional. This empirical regularity has been observed up to now for a total of 11 CGEs for very diverse countries, and we therefore state it as law. It implies that these models display price rigidity with respect to endowment re-allocations, an observation which has broad implications for their capacity to capture general equilibrium effects. [ABSTRACT FROM PUBLISHER]

An extensive literature attempts to identify the economic impact of tourism expenditure. While Input-Output methods have been widely applied these may not always be appropriate for such applications and there is a growing use of more flexible Computable General Equilibrium (CGE) approaches. This paper uses a multi-period Scottish CGE model to estimate the system-wide effects of the temporary tourism expenditure related to the Glasgow 2014 Commonwealth Games. We quantify the sensitivity of our results to model specification, focusing in particular on how investment and consumption decisions are made and shifted over time to accommodate the temporary tourism shock. As part of this analysis we identify the pre-announcement period that optimises the present value of the economic impact. Whilst the empirical results apply to a specific event, our results have implications for similar analyses applied to mega events and other temporary phenomena affecting tourism expenditure, such as terrorism attacks or epidemics. [ABSTRACT FROM AUTHOR]

We use an overlapping generations model economy with endogenous retirement to study the 2011 and 2013 reforms of the Spanish public pension system. These reforms delay the legal retirement ages, increase the contributivity of the system, and adopt a sustainability factor and a pension revualuation index that effectively transform the Spanish pension system into a defined-contribution pension system. We find that these reforms improve the sustainability of Spanish pensions substantially, and that they limit the tax increases that would have been necessary to finance the pension system deficits. But these results are achieved at the expense of large reductions in the real value of the average pension. This reduction is progressive and, by 2050, the average pension is approximately 30% smaller in real terms than what it would have been under the pension system rules that prevailed in 2010. We also show that these reforms are costly in welfare terms and that households born between 1950 and 1970, young disabled workers who are alive at the time of the reform, and future cohorts bear the highest welfare costs. The substantial reduction of pensions and the high welfare costs that these reforms bring about lead us to conjecture that further reforms lurk in the future of Spanish pensions. [ABSTRACT FROM AUTHOR]

This paper investigates the feasibility of changes in cropland-use as an adaptation strategy to minimise the economy-wide costs of climate change on agriculture. Nepal makes an interesting case study as it is one of the most vulnerable agricultural economies within South Asia. We develop a comparative static multi-household computable general equilibrium (CGE) model for Nepal, with a nested set of constant elasticity of transformation (CET) functional forms, to model the allocation of land within different agricultural sectors. Land transformation elasticities in these CET functions are allowed to reflect the ease of switching from one crop to another based on their agronomic characteristics. The results suggest that, in the long run, farmers in Nepal tend to allocate land to crops that are comparatively less impacted by climate change, such as paddy, thereby minimising the economy-wide impacts of climate change. Furthermore, the results reveal that land-use change tends to reduce the income disparity between different household groups by significantly moderating the income losses of marginal farmers. Therefore, it is suggested that policy makers in Nepal should prioritise schemes such as providing climate-smart paddy varieties (i.e., those that are resistant to heat, drought and floods) to farmers, subsidising fertilizers, improving agronomic practices, and educating farmers to switch from crops that are highly impacted by climate change to those that are not, such as paddy. [ABSTRACT FROM AUTHOR]

TERM is used to analyse the short-term regional economic impact of an increase in industries' transport costs when paying E- Tolls. Market-clearing and accounting equations allow regional economies to be represented as an integrated framework, labour adjusts to accommodate increasing transportation costs, and investments change to accommodate capital that is fixed. [ABSTRACT FROM AUTHOR]

This paper extends the Orani-G Computable General Equilibrium model with an externality market. The externality market is modelled with a limited number of pollution permits that are traded between representative firms in different sectors. The model is applied to identify the gains of a common nitrogen regulation system for Danish agriculture crop and aquaculture production. Common regulation across the two sectors is found to increase GDP by euro 32 million, corresponding to 2.2% of their initial GDP contribution. The direct effect in the two sectors is euro 39 million, where the spill-over effect is − 7 million. Full use of recirculation technology in aquaculture entails a further increase in GDP to 106 million. The introduction of a common regulatory system and recirculation technology, simultaneous with a reduction of the common nitrogen cap of 17.6%, corresponding to the current policy objectives, is found to increase GDP by 52 million, 4.1% of their initial contribution. Hence, introducing a common regulatory system and taking advantage of the new technology more than counterbalances the negative socio-economic effect of a cap reduction. The analysis points to the importance of introducing more coherent regulatory frameworks that include all polluters under the same regulatory system. [ABSTRACT FROM AUTHOR]

The present paper analyses the impact of the EU funds, for the European region of Azores, as they affect GDP, employment, and the wellbeing of families in different income levels, using a dynamic, multi-sector, computable general equilibrium model ( CGE) - Azor Mod. Simulating the impact of a total cut in transfers and comparing with a base business as usual scenario, it is concluded that the elimination of the EU transfers could cause a sharp permanent fall on public demand and an immediate 2 per cent fall in GDP. The fall in public demand causes a fall in consumer and investment prices which will foster a sharp increase in investment demand that gradually causes GDP to grow back to its initial levels within a ten year period. [ABSTRACT FROM AUTHOR]

By replacing the current income tax with a national sales tax, the FairTax proposal would end the double taxation of saving inherent in the existing tax code and, by doing so, raise output, employment, investment and capital stock relative to the benchmark economy. While these positive effects would be felt almost immediately, the FairTax is very much an investment in the future. Its full benefits would be realized only after the economy achieved a new 'steady state,' some 20-25 years into implementation. Only by that point, will the effects on growth have been fully absorbed into the economy and the wellbeing of most households across most income groups improved. The policy choice, then, is between the status quo, and a new policy that would inflict some short-run pain as the price of a permanently expanded economy. [ABSTRACT FROM AUTHOR]

We explore how and by how much the values of elasticities of substitution affect estimates of the cost of emissions reduction policies in computable general equilibrium (CGE) models. We use G-Cubed, an intertemporal CGE model, to carry out a sensitivity and factor decomposition analysis. The decomposition analysis determines the contributions of changes in average abatement costs and changes in baseline emissions to the change in total mitigation costs. The latter has not previously been considered. Average abatement cost rises non-linearly as elasticities are reduced. Changes in the substitution elasticities between capital, labor, energy, and materials have a greater impact on mitigation costs than do inter-fuel elasticities of substitution. The former have more effect on business as usual emissions and the latter on average abatement costs. As elasticities are reduced, business as usual emissions and GDP growth also decrease so that there is not much variation in the total costs of reaching a given target across the parameter space. Our results confirm that the cost of climate mitigation policy is at most a few percent of global GDP. [ABSTRACT FROM AUTHOR]

As part of its global obligations to responding to climate change, the Philippines is committed to limiting future emissions growth through policy interventions such as funding research on mitigation and direct regulation of energy efficiency requirements. The Philippines is also interested in extensions of such policies, including the use of carbon taxes, measures to enhance energy efficiency, and changes to the country’s electricity generation mix. This paper develops a computable general equilibrium (CGE) model of the Philippine economy to analyse the effects of such climate change policy options in the period to 2020. The modelling results indicate that given the current level of development in the Philippine electricity generation and transport sectors, even relatively modest measures have marked impacts on emissions with marginal economic impacts. A carbon tax of $US5 per a tonne, results in a 9.8% reduction in emissions and a 0.5% reduction in GDP from baseline levels to 2020. Similarly, a 2% increase in energy efficiency throughout the Philippine economy results in an 8.5% reduction in emissions and 0.6% reduction in GDP compared to the underlying baseline of no policy response. Finally, a 10% shift in the coal-fired generation capacity results in an 11.0% reduction in emissions with GDP in fact increasing by 1.9% over baseline levels. [ABSTRACT FROM AUTHOR]

This paper describes how we transformed the 2002 Ugandan Supply Use Table (SUT) into the required structure of a database for the static Ugandan CGE model Dixon et al. (ORANI: A multisectoral model of the Australian economy, ). We describe the unique features captured in the Ugandan SUT as well as that of the CGE database. We highlight the structural differences of the published data and that of the CGE database. In describing the SUT we identify data issues, such as negative capital rentals and omitted data entries that had to be addressed before the database could be constructed. The ideas put forward in this paper describe, in a pragmatic manner, not only how to transform published data into a CGE database, but also how to create an additional sector in the CGE database. For the Ugandan CGE database, we created an additional Oil sector. [ABSTRACT FROM AUTHOR]

The Czech Republic is obliged to implement pollution charges in accordance with the EU environmental policy. The charges may affect international competitiveness of the country, since they are applied to the domestically produced, but not to the imported commodities. We investigate how such environmental taxation of six main pollutants affects the Czech competitiveness. Using computable general equilibrium modeling with bottom-up approach, we consider a small-open economy with endogenous unemployment and ten types of taxes. A distinction between taxes on products and taxes on production is essential for analysis of a fiscal policy. Emissions reduction is possible in our model either through substitution with less polluting inputs, or a reduction of output, or through technical abatement. The last channel for emission reduction is ignored by other studies. The results show that the imports should not be affected by the tax reform, except for coal. Exports will increase in the non-energy-intensive and the biomass industries, but it will decrease in the chemical, the coal, and the metal industries. The overall effect on the trade balance is slightly negative. We conclude that investments in energy-saving technologies are necessary in order to preserve international competitiveness. [ABSTRACT FROM PUBLISHER]

Emissions offset schemes, such as the Clean Development Mechanism established under the Kyoto Protocol and sectoral crediting schemes which are currently discussed as a new market-based mechanism within the United Nations Framework Convention on Climate Change, allow industrialized Annex I countries to offset part of their domestic emissions by investing in emissions-reduction measures in developing non-Annex I countries. Here we present a novel modelling framework for offset schemes which can be used in computable general equilibrium models to quantify the sector-specific and macroeconomic impacts of clean-development investments. Compared to conventional approaches that mimic offset schemes as sectoral emissions trading, our framework adopts a micro-consistent representation of an offset scheme's incentive structure and its investment characteristics. In our empirical application, we show that incentive compatibility implies that the offset-generating sectors do not suffer, and that overall cost savings from the offset scheme tend to be lower than suggested by conventional modelling approaches. [ABSTRACT FROM AUTHOR]

This study employs a global computable general equilibrium ( CGE) model to examine the potential impacts of the Economic Partnership Agreements ( EPAs) between the European Union ( EU) and the Southern African Development Community ( SADC). The simulation results suggest that a comprehensive EPA scenario is welfare-improving for many SADC members. SADC preferential access to the EU markets is the key source for the prospective welfare and terms of trade gains. Overall, SADC production structures become more concentrated in export-oriented sectors. These structural changes are accompanied by a high degree of adjustment and substantial fiscal losses. [ABSTRACT FROM AUTHOR]

We aim to assess the sectoral and poverty impacts of changes in agricultural policy in Colombia. For this, we use an agriculture specialized static computable general equilibrium model, together with a microsimulation model that allows employment to shift between sectors. Results indicate that the sectoral impact from policy changes tends to be small and that it considerably varies across crops. The macro model yields some gains in wages and capital rents, a relatively larger increase in land rents, and limited labor reallocation, together leading to small poverty impacts as calculated through the microsimulation model. The incidence of rural poverty decreases by less than 1% and the same happens to the poverty gap. In addition, poverty reductions are concentrated among households near the middle of the income distribution. [ABSTRACT FROM AUTHOR]

Negotiations for the EU-Singapore FTA were concluded on December 6, 2012. Given that this is the EU's first FTA with an ASEAN member country and the second one with a major Asian trading partner after the conclusion of the EU-Korea FTA, this agreement paves the way for future FTAs with countries in the region. The goal of this paper is to quantify the economic impacts of the EU-Singapore FTA using a dynamic computable general equilibrium model. The resutls estimated in this paper suggest that the bilateral reduction of tariff and non-tariff barriers brings benefits for both sides: Singapore GDP is expected to increase by € 2.7 billion whereas the EU gains are assessed at € 550 million. In addition, EU exports to Singapore would rise by some € 1.4 billion and Singapore's exports to the EU by some € 3.5 billion. In a complementary scenario, the current paper also assesses the value of this FTA as an insurance policy against any hypothetical tariffs hikes in Singapore to WTO bound levels. In such a 'worst case' scenario, the EU-Singapore FTA will protect EU GDP from a decrease of € 350 million and prevents a loss of € 3.7 billion EU exports to Singapore. [ABSTRACT FROM AUTHOR]

The establishment of an Association Agreement/Deep and Comprehensive Free Trade Agreement (AA/DCFTA) with the European Union (EU) would be the next significant step towards Ukraine's deeper integration into the world economy. Despite widely expected additional welfare gains, the signing of the AA/DCFTA at the Third Eastern Partnership summit in November 2013 in Vilnius was suspended by the Ukrainian government due to geopolitical concerns and a severe economic and financial crisis in Ukraine coming along with high external debt and a substantial public budget deficit. This puts the fiscal consequences of Ukraine's continued liberalization into focus, as transition and developing countries face higher fiscal costs associated with trade integration. Accordingly, this paper contributes to the literature by analyzing the part of the potential EU-Ukraine DCFTA which leads to a loss of tariff revenues, namely the tariff elimination. In particular, we apply a static Computable General Equilibrium (CGE) model for the single small open economy of Ukraine and focus on the effects of Ukraine's unilateral tariff elimination by simulating three scenarios reflecting different means to compensate for the loss of tariff revenues. It turns out to be important to take these costs into consideration while modeling trade liberalization, as the results vary significantly across the scenarios. [ABSTRACT FROM AUTHOR]

The overlapping generations (OLG) model is an important framework for analyzing any type of question in which age cohorts are affected differently by exogenous shocks. However, as the dimensions and degree of heterogeneity in these models increase, the computational burden imposed by rational expectations solution methods for nonstationary equilibrium transition paths increases exponentially. As a result, these models have been limited in the scope of their use to a restricted set of applications and a relatively small group of researchers. In addition to providing a detailed description of the benchmark rational expectations computational method, this paper presents an alternative method for solving for equilibrium transition paths in OLG life cycle models that is new to this class of model. The key insight is that even naïve limited information forecasts within the model produce aggregate time series similar to full information rational expectations time series as long as the naïve forecasts are updated each period. We find that our alternate model forecast method reduces computation time by 85 percent, and the approximation error is small. [ABSTRACT FROM AUTHOR]

For the purposes of this study, we will construct a static monopolistically-competitive computable general equilibrium model to quantify the endogenous productivity spillovers from foreign and domestic firms, using the Chinese economy as a case study. Our simulation results indicate: (i) that the net spillover effects are positive in terms of national total output, GDP and welfare; (ii) that both state-owned and privately-owned firms benefit, but that private firms benefit more; (iii) that industries with large volumes of foreign direct investment ( FDI) do not necessarily observe the largest spillover effects; and (iv) that the spillover effects become more prominent when the initial market structure is more concentrated. [ABSTRACT FROM AUTHOR]

We assess the short- and long-run impacts of tariff reform policies on Bangladeshi households' poverty and income distribution by developing an 86-sector, four-factor, and nine-household-group computable general equilibrium (CGE) model. The main findings are that the complete removal of tariffs leads to a decrease in overall poverty with rich household groups in a relatively better position. In the short run poverty incidence increases for rural landless, urban illiterate, and low-educated household groups whereas rural large farmer and urban medium household groups enjoy improvements in all poverty indicators. In terms of income distribution, trade liberalization enhances inequality slightly, but there is a tendency towards more equitable distribution in the long run. The choice of a fiscal compensatory mechanism with consumption tax is likely to play a negative role in terms of poverty and inequality in the short run; however, interestingly, the results are pro-poor in the long run. [ABSTRACT FROM AUTHOR]

This paper explores income distribution modeling approaches for poverty analysis in a CGE micro-simulation context. Income distribution functional forms such as the lognormal, Pareto, beta distribution and empirical methods are currently used in CGE models in parallel with the estimation of FGT poverty indices. The particular methods or functional forms used in this context are not always clearly defined and justified. In this paper, we investigate and provide better criteria for selecting a functional distribution for poverty analysis. To achieve this, we apply parametric estimation to seven functional forms and compare the results to a purely “empirical” method. The results showed that no single form is more appropriate in all instances or for all household subgroups. The choice of a modeling approach should be motivated by a search for best fit and should be based on appropriate statistical tests. Selecting inappropriate distributional forms can lead to biased results in terms of poverty analysis. Introducing functional forms in the empirical approach can also provide greater confidence in the results obtained. [ABSTRACT FROM AUTHOR]

The study investigates how government can implement an increase in the rate of value-added tax (VAT) to ensure that the final rate of 15% is achieved in a way that satisfies the public (households and business community) and also ensures maximum revenue generation for the government. The nation's VAT rate is presently at 5%. A recursive dynamic CGE model is used to address the study's objective, and the model is solved and simulated for 10 years. It is found that the best policy option is to increase the rate by 2.5% yearly for the next 4 years. The option delivers the best outcomes for real GDP (and its growth), investment, intermediate imports, government expenditure and household consumption when compared to alternative options that require 5% increase (implemented in the first and fourth years) and 10% increment (implemented in the first year). Government revenue (divided into VAT, tax and total revenue) registers the highest percentage changes under 2.5% VAT policy in the medium term (6–10 years). [ABSTRACT FROM AUTHOR]