The CRESH revival - or how to model agriculture in AGE models more realistically

Applied general equilibrium (AGE) modeling is a versatile tool for guiding public policies. However, the standard treatment of production function in AGE models is not completely satisfactory. It is commonly based on nested CES functions that are rigid and empirically hard to estimate. In this paper, I will show that by applying a more general functional form - CRESH - the agricultural sector can be presented more realistically in AGE models.