Book contents
- Introduction to Computable General Equilibrium Models
- Introduction to Computable General Equilibrium Models
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Text Boxes
- Acknowledgments
- About This Book
- 1 Introduction to Computable General Equilibrium Models
- 2 Elements of a Computable General Equilibrium Model
- 3 The CGE Model Database
- 4 Final Demand in a CGE Model
- 5 Supply in a CGE Model
- 6 Factors of Production in a CGE Model
- 7 Trade in a CGE Model
- 8 Taxes in a CGE Model
- 9 Regulations in a CGE Model
- 10 Conclusion
- Model Exercises
- Practice and Review Answer Key
- Model Exercise Answer Key
- Book part
- Glossary
- References
- Author Index
- Subject Index
5 - Supply in a CGE Model
Published online by Cambridge University Press: 11 December 2020
- Introduction to Computable General Equilibrium Models
- Introduction to Computable General Equilibrium Models
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Text Boxes
- Acknowledgments
- About This Book
- 1 Introduction to Computable General Equilibrium Models
- 2 Elements of a Computable General Equilibrium Model
- 3 The CGE Model Database
- 4 Final Demand in a CGE Model
- 5 Supply in a CGE Model
- 6 Factors of Production in a CGE Model
- 7 Trade in a CGE Model
- 8 Taxes in a CGE Model
- 9 Regulations in a CGE Model
- 10 Conclusion
- Model Exercises
- Practice and Review Answer Key
- Model Exercise Answer Key
- Book part
- Glossary
- References
- Author Index
- Subject Index
Summary
In this chapter, we examine the supply side of an economy as represented in computable general equilibrium (CGE) models. The production data in the social accounting matrix (SAM) depict the production process, in which firms combine intermediate inputs with factors of production to produce goods and services. We use these data to calculate input-output coefficients, which describe the input intensity of production processes. CGE models break down the production technology into parts, depicting how subprocesses are nested within the overall production process. Within each nest, behavioral equations describe producers’ efficiency-maximizing input demands and output levels, subject to their production technology. Export transformation functions, used in some CGE models, describe the allocation of production between domestic and export markets.We also examine the supply and demand structure of a CGE model with a non-diagonal make matrix and a technical appendix examines a case of energy nesting.
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- Introduction to Computable General Equilibrium Models , pp. 145 - 173Publisher: Cambridge University PressPrint publication year: 2021