Book contents
- Frontmatter
- Contents
- Acknowledgments
- List of contributors
- Foreword
- I Introduction and overview
- II Structure of GTAP framework
- 2 Structure of GTAP
- 3 Overview of the GTAP data base
- 4 GTAP behavioral parameters
- 5 Aggregation and computation of equilibrium elasticities
- 6 Implementing GTAP using the GEMPACK software
- III Applications of GTAP
- IV Evaluation of GTAP
- Glossary of GTAP notation
- Index
4 - GTAP behavioral parameters
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- Acknowledgments
- List of contributors
- Foreword
- I Introduction and overview
- II Structure of GTAP framework
- 2 Structure of GTAP
- 3 Overview of the GTAP data base
- 4 GTAP behavioral parameters
- 5 Aggregation and computation of equilibrium elasticities
- 6 Implementing GTAP using the GEMPACK software
- III Applications of GTAP
- IV Evaluation of GTAP
- Glossary of GTAP notation
- Index
Summary
Introduction and overview
This chapter documents the parameters that specify marginal behavior in the Global Trade Analysis Project (GTAP) model. These behavioral parameters, along with the theory of the model as described in Chapter 2 and the composition of the benchmark data (i.e., the value flows described in Chapter 3), will determine simulation results. No individual component can be said to be more important than the others. For some simulations, it is the accounting identities that determine results, whereas the behavioral parameters may play a relatively small role. For other simulations, the specification of certain elasticities is of paramount importance. Documentation of these elasticities is the purpose of this chapter.
In section II, we discuss the behavioral parameters at the disaggregate 37-commodity, 24-region level. Most behavioral parameters in GTAP are based on constant elasticity specifications [e.g., the constant elasticity of substitution (CES) function], which simplify model calibration. However, consumer behavior in GTAP is based on the constant difference elasticity (CDE) function, of which the CES is a special case. Because this has not been widely used in applied general equilibrium (AGE) modeling to date, we provide a brief overview and motivation for the CDE in section III of this chapter. We then discuss the calibration and performance of the CDE demand system.
Disaggregate behavioral parameters
There are four types of behavioral parameters in GTAP: elasticities of substitution (in both consumption and production), transformation elasticities that determine the degree of mobility of primary factors across sectors, the flexibilities of regional investment allocation, and consumer demand elasticities.
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- Global Trade AnalysisModeling and Applications, pp. 124 - 148Publisher: Cambridge University PressPrint publication year: 1996
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