Policy Evaluation with Computable General Equilibrium Models

Fossati, Amedeo; Wiegard, Wolfgang

doi:10.4324/9780203167199

Cited by 5 publications

(7 citation statements)

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“…Thus, the cost of capital increases to the extent pro…t retentions are used as a marginal source of …nance. 18 Non-Corporate Firms: To derive the distinct cost of capital formula for non-corporate …rms we insert the respective tax parameters for non-corporate …rms 19 into the cost of capital formula displayed in (20).…”

Section: Financial Behaviourmentioning

confidence: 99%

The impact of the 2008 German corporate tax reform: A dynamic CGE analysis

Rădulescu

Stimmelmayr²

2010

Economic Modelling

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In this paper we develop the dynamic CGE model, ifoMod, which is designed to analyse the impact of fundamental tax reforms and in particular capital income tax reforms for Germany. The model is in line with neoclassical growth theory and features all important behavioural interactions between the four major building blocks of an economy including the …rm and household sector, the government and the rest of the world. We consider …rms of di¤erent legal forms which all face an inter-temporal investment problem, a …nancing problem w.r.t. the optimal choice of debt and equity …nancing as well as the factor input problem when deciding on the optimal amount of di¤erent skill types of labour employed. We show the impact of di¤erent types of taxes on the behavioral margins of …rms and households and the conducted simulation shows the impact of the latest German corporate tax reform of 2008 on the German macroeconomic variables such as investments, GDP, consumption and household's welfare.

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Section: Financial Behaviourmentioning

confidence: 99%

The impact of the 2008 German corporate tax reform: A dynamic CGE analysis

Rădulescu

Stimmelmayr²

2010

Economic Modelling

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“…Events evaluation by tourism researchers and consultants is one of the relatively few areas left in which I-O based multiplier models are still used for evaluation and policy advice purposes. In industrialized countries such as Australia, the United States, and the United Kingdom, I-O techniques are recognized as being based on an incomplete model of the economy and thus as being inappropriate for economic impact assessment (Dixon and Parmenter 1996;Partridge and Rickman 1998;Harrison et al 2000;Fossati and Wiegard 2001).…”

Section: Input-output Modelsmentioning

confidence: 99%

“…CGE models represent an example of current best practice in assessing economy-wide impacts of changes in expenditure within an economy. CGE analysis is being widely employed to explore the economic impacts of policy initiatives and frameworks and broader changes as diverse as hazardous waste management, trade liberalization, tariff protection, environment-economy interactions, structural adjustment, agricultural stabilization programs, technological change, labor market deregulation, financial market deregulation, taxation changes, macroeconomic reform, economic transition, international capital linkages, public infrastructure, and industry-sector studies (Dixon and Parmenter 1996;Yao and Liu 2000;Harrison et al 2000;Fossati and Wiegard 2001).…”

Section: Input-output Modelsmentioning

confidence: 99%

Estimating the Impacts of Special Events on an Economy

Dwyer

Forsyth

Spurr

2005

Journal of Travel Research

220

158

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Special events are typically regarded as major generators of economic activity and jobs. Despite its continued use in event assessment, Input-Output (I-O) analysis has been rejected in other areas of economic impact evaluation in favor of more rigorous evaluation techniques that recognize resource constraints in the economy and interindustry effects of demand shocks. This article discusses traditional and alternative perspectives on event assessment and the assumptions on which each approach are based. Illustrative results are then provided from a study that contrasted the economic impacts from a selected event analyzed by use of a traditional I-O approach, with estimates provided through the use of a more comprehensive computable general equilibrium (CGE) model. Issues involved in the wider use of CGE models for event assessment are discussed together with the need for further development in event evaluation techniques.

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“…The opaqueness of the computer coding also probably contributed to the perception. Amedeo Fossati and Wolfgang Wiegard (2002) argue that AGE models are "black boxes" because the causal links between assumptions and outputs are often obscure for anyone other than the builder of the model. Judd (1997) asserts that the black-box critique undermined the status of AGE analysis with journal publishers.…”

Section: The Black-box Critiquementioning

confidence: 99%

Applied General Equilibrium Analysis

Ballard¹,

Johnson²

2017

History of Political Economy

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Walrasian general-equilibrium theory provided the central framework of 20 th century economics, "the ultimate model of the market" (John Shoven and John Whalley 2015, 2). Joseph Schumpeter considered it the "Magna Carta" of economics, providing both a constitutional document and a map for the field (1954, 242 and 827). In the 1950s and 1960s, Harry Johnson (1951-52, 1956), Arnold Harberger (1962), and others used general-equilibrium methods to study a variety of applied policy issues, such as the welfare effects of tariffs and the incidence of the corporate income tax. The models used by these researchers were small enough that they could be solved analytically. By the 1970s, economists were developing general-equilibrium models of sufficient size and complexity that it was necessary to use computers to find numerical solutions. In this paper, we will discuss both analytical and computational models, but our main focus is on the computational models. The computational models have come to be known as applied general-equilibrium (AGE) or computational GE or computable GE (CGE) models. We will refer to the computational models as AGE models, even though the analytical models also fall under the rubric of applied work. AGE models involve mathematical specifications of the behaviors of agents, who interact through supply and demand for different goods in a Walrasian general-equilibrium system. Government policies are typically modeled as constraints to be manipulated. The models produce computer simulations of the effects of policy changes on economic variables, such as prices, quantities, growth rates, employment, income, and economic efficiency. AGE models are most widely employed in international trade, public finance, economic development, and

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Policy Evaluation with Computable General Equilibrium Models

Cited by 5 publications

References 0 publications

The impact of the 2008 German corporate tax reform: A dynamic CGE analysis

The impact of the 2008 German corporate tax reform: A dynamic CGE analysis

Estimating the Impacts of Special Events on an Economy

Applied General Equilibrium Analysis

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