GAMS 2.50.094 DOS Extended/C

12/10/99 14:41:33 PAGE 1

CGE5

4

*INTRODUCTION ====================================================

In this file, the starting point is CGE4.

The new feature is that the rest of the world has been added. A

CET-Armington specification is used for foreign trade.

The line before any new feature or modification starts with

"*++". However, in the section where values are assigned

to variables and parameters, changes are not signalled.

In the experiment, the impact of a doubling of (initially positive)

foreign savings is explored.

19

20

*SETS ============================================================

21

22

SETS

23

24

AC global set (SAM accounts and other items)

25

/

AGR-A

agricultural activity

26

NAGR-A

non-agricultural activity

27

AGR-C

agricultural commodity

28

NAGR-C

non-agricultural commodity

29

LAB

labor

30

CAP

capital

31

U-HHD

urban household

32

R-HHD

rural household

33

GOV

government

34

S-I

savings-investment

35

YTAX

income tax

36

STAX

sales tax

37

*++

38

TAR

import tariff

39

*++

40

ROW

rest of world

41

TOTAL

total account in SAM

/

42

43

ACNT(AC) all elements in AC except total

44

45

A(AC)

activities

46

/AGR-A, NAGR-A/

47

48

C(AC)

commodities

49

/AGR-C, NAGR-C/

50

*++

51

CE(C)

exported commodities

52

/AGR-C/

53

*++

54

CNE(C)

non-exported commodities

55

/NAGR-C/

56

*++

57

CM(C)

imported commodities

58

/NAGR-C/

59

*++

60

CNM(C)

non-imported commodities

61

/AGR-C/

62

63

F(AC)

factors

64

/LAB, CAP/

65

66

I(AC)

institutions

67

/U-HHD, R-HHD, GOV, ROW/

68

69

H(I)

households

70

/U-HHD, R-HHD/

71

;

72

73

ALIAS(AC,ACP); ALIAS(C,CP); ALIAS(F,FP); ALIAS(I,IP);

74

ACNT(AC) = YES; ACNT('TOTAL') = NO; ALIAS(ACNT,ACNTP);

75

76

77

*PARAMETERS======================================================

78

79

PARAMETERS

80

81

ad(A)

efficiency parameter in the production fn for a

82

alpha(F,A)

share of value-added to factor f in activity a

83

*++

84

aq(C)

Armington function shift parameter for commodity c

85

*++

86

at(C)

CET function shift parameter for commodity c

87

beta(C,H)

share of household consumption spending on commodity c

88

cpi

consumer price index

89

cwts(C)

weight of commodity c in the CPI

90

*++

91

deltaq(C)

Armington function share parameter for commodity c

92

*++

93

deltat(C)

CET function share parameter for commodity c

94

ica(C,A)

qnty of c as intermediate input per unit of activity a

95

*++

96

pwe(C)

export price for c (foreign currency)

97

*++

98

pwm(C)

import price for c (foreign currency)

99

qg(C)

government demand for commodity c

100

qinvbar(C)

base-year qnty of investment demand for commodity c

101

*++

102

rhoq(C)

Armington function exponent for commodity c

103

*++

104

rhot(C)

CET function exponent for commodity c

105

shry(H,F)

share for household h in the income of factor f

106

*++

107

te(C)

export subsidy rate for commodity c

108

theta(A,C)

yield of output c per unit of activity a

109

*++

110

tm(C)

import tariff rate for commodity c

111

tq(C)

rate of sales tax for commodity c

112

tr(I,IP)

transfer from institution ip to institution i

113

ty(H)

rate of income tax for household h

114

;

115

116

*VARIABLES=======================================================

117

118

VARIABLES

119

120

EG

government expenditures

121

*++

122

EXR

exchange rate (dom. currency per unit of for. currency)

123

*++

124

FSAV

foreign savings (foreign currency)

125

IADJ

investment adjustment factor

126

MPS(H)

marginal (and average) propensity to save for household h

127

PA(A)

price of activity a

128

*++

129

PD(C)

domestic price of domestic output c

130

*++

131

PE(C)

export price for c (domestic currency)

132

*++

133

PM(C)

import price for c (domestic currency)

134

*++

135

PQ(C)

composite commodity price for c

136

PVA(A)

value-added price for activity a

137

PX(C)

producer price for commodity c

138

QA(A)

level of activity a

139

*++

140

QD(C)

quantity sold domestically of domestic output c

141

*++

142

QE(C)

quantity of exports for commodity c

143

QF(F,A)

quantity demanded of factor f from activity a

144

QFS(F)

supply of factor f

145

QH(C,H)

quantity consumed of commodity c by household h

146

QINT(C,A)

qnty of commodity c as intermediate input to activity a

147

QINV(C)

quantity of investment demand for commodity c

148

*++

149

QM(C)

quantity of imports of commodity c

150

*++

151

QQ(C)

quantity of goods supplied domestically (composite supply)

152

*++

153

QX(C)

quantity of domestic output of commodity c

154

WALRAS

dummy variable (zero at equilibrium)

155

WF(F)

average price of factor f

156

WFDIST(F,A)

wage distortion factor for factor f in activity a

157

YF(H,F)

transfer of income to household h from factor f

158

YG

government revenue

159

YH(H)

income of household h

160

;

161

162

*EQUATIONS=======================================================

163

164

EQUATIONS

165

166

*PRICE BLOCK+++++++++++++++++++++++++++

167

*++

168

PMDEF(C)

import price for commodity c (domestic currency)

169

*++

170

PEDEF(C)

export price for commodity c (domestic currency)

171

*++

172

ABSORB(C)

absorption for commodity c

173

*++

174

OUTVAL(C)

output value for commodity c

175

PADEF(A)

price for activity a

176

PVADEF(A)

value-added price for activity a

177

178

*PRODUCTION AND COMMODITY BLOCK++++++++

179

PRODFN(A)

Cobb-Douglas production function for activity a

180

FACDEM(F,A)

demand for factor f from activity a

181

INTDEM(C,A)

intermediate demand for commodity c from activity a

182

OUTPUTFN(C)

output of commodity c

183

*++

184

ARMING(C)

composite supply (Armington) function for commodity c

185

*++

186

IMPDOMRAT(C)

import-domestic demand ratio for commodity c

187

*++

188

ARMNM(C)

composite supply for non-imported commodity c

189

*++

190

CET(C)

output transformation (CET) function for commodity c

191

*++

192

EXPDOMRAT(C)

export-domestic supply ratio for commodity c

193

*++

194

CETNE(C)

output transformation for non-exported commodity c

195

196

197

*INSTITUTION BLOCK+++++++++++++++++++++

198

FACTTRNS(H,F)

transfer of income from factor f to h-hold h

199

HHDINC(H)

income of household h

200

HHDEM(C,H)

consumption demand for household h & commodity c

201

INVDEM(C)

investment demand for commodity c

202

GOVREV

government revenue

203

GOVEXP

government expenditures

204

205

*SYSTEM CONSTRAINT BLOCK+++++++++++++++

206

FACTEQ(F)

market equilibrium condition for factor f

207

COMEQ(C)

market equilibrium condition for composite commodity c

208

*++

209

CURACC

current account balance for RoW

210

SAVINV

savings-investment balance

211

PNORM

price normalization

212

;

213

214

*PRICE BLOCK+++++++++++++++++++++++++++

215

*++

216

PMDEF(C)$CM(C)..

PM(C) =E= (1 + tm(C))*EXR*pwm(C);

217

*++

218

PEDEF(C)$CE(C)..

PE(C) =E= (1 - te(C))*EXR*pwe(C);

219

*++

220

ABSORB(C)..

PQ(C)*QQ(C)

221

=E= (PD(C)*QD(C) + (PM(C)*QM(C))$CM(C))*(1 + tq(C));

222

*++

223

OUTVAL(C)..

PX(C)*QX(C) =E= PD(C)*QD(C) + (PE(C)*QE(C))$CE(C);

224

225

PADEF(A)..

PA(A) =E= SUM(C, PX(C)*theta(A,C));

226

*++

227

PVADEF(A)..

PVA(A) =E= PA(A) - SUM(C, PQ(C)*ica(C,A));

228

229

230

*PRODUCTION AND COMMODITY BLOCK++++++++

231

232

PRODFN(A)..

QA(A) =E= ad(A)*PROD(F, QF(F,A)**alpha(F,A));

233

234

FACDEM(F,A)..

WF(F)*WFDIST(F,A) =E= alpha(F,A)*PVA(A)*QA(A)

235

/QF(F,A);

236

237

INTDEM(C,A)..

QINT(C,A) =E= ica(C,A)*QA(A);

238

239

OUTPUTFN(C)..

QX(C) =E= SUM(A, theta(A,C)*QA(A));

240

*++

241

ARMING(C)$CM(C)..

QQ(C) =E= aq(C)*(deltaq(C)*QM(C)**(-rhoq(C))

242

+ (1-deltaq(C))*QD(C)**(-rhoq(C)))**(-1/rhoq(C));

243

*++

244

IMPDOMRAT(C)$CM(C)..

QM(C)/QD(C) =E=

245

( (PD(C)/PM(C))

246

*(deltaq(C)/(1-deltaq(C))) )**(1/(1 + rhoq(C)));

247

*++

248

ARMNM(C)$CNM(C)..

QQ(C) =E= QD(C);

249

*++

250

CET(C)$CE(C)..

QX(C) =E= at(C)*(deltat(C)*QE(C)**rhot(C)

251

+ (1-deltat(C))*QD(C)**rhot(C) )**(1/rhot(C));

252

*++

253

EXPDOMRAT(C)$CE(C)..

QE(C)/QD(C) =E= ( PE(C)/PD(C)

254

*(1-deltat(C))/deltat(C) )**(1/(rhot(C)-1) );

255

*++

256

CETNE(C)$CNE(C)..

QX(C) =E= QD(C);

257

258

259

*INSTITUTION BLOCK+++++++++++++++++++++

260

261

FACTTRNS(H,F)..

YF(H,F)

262

=E= shry(H,F)*SUM(A, WF(F)*WFDIST(F,A)*QF(F,A));

263

264

*++

265

HHDINC(H)..

YH(H) =E= SUM(F, YF(H,F)) + tr(H,'GOV')

266

+ EXR*tr(H,'ROW');

267

268

HHDEM(C,H)..

QH(C,H) =E=

269

beta(C,H)*(1 - MPS(H))*(1 - ty(H))*YH(H)/PQ(C);

270

271

INVDEM(C)..

QINV(C) =E= qinvbar(C)*IADJ;

272

*++

273

GOVREV..

YG =E= SUM(H, ty(H)*YH(H))

274

+ EXR*tr('GOV','ROW')

275

+ SUM(C, tq(C)*(PD(C)*QD(C) + (PM(C)*QM(C))$CM(C)))

276

+ SUM(C$CM(C), tm(C)*EXR*pwm(C)*QM(C))

277

+ SUM(C$CE(C), te(C)*EXR*pwe(C)*QE(C))

278

;

279

280

GOVEXP..

EG =E= SUM(C, PQ(C)*qg(C)) + SUM(H, tr(H,'GOV'));

281

;

282

283

284

*SYSTEM CONSTRAINT BLOCK+++++++++++++++

285

286

FACTEQ(F)..

SUM(A, QF(F,A)) =E= QFS(F);

287

*++

288

COMEQ(C)..

QQ(C) =E= SUM(A, QINT(C,A)) + SUM(H, QH(C,H))

289

+ qg(C) + QINV(C);

290

*++

291

CURACC..

SUM(C$CE(C), pwe(C)*QE(C)) + SUM(I, tr(I,'ROW'))

292

+ FSAV =E= SUM(C$CM(C), pwm(C)*QM(C));

293

*++

294

SAVINV..

SUM(H, MPS(H)*(1 - ty(H))*YH(H)) + (YG - EG)

295

+ EXR*FSAV =E= SUM(C, PQ(C)*QINV(C)) + WALRAS;

296

297

PNORM..

SUM(C, PQ(C)*cwts(C)) =E= cpi;

298

299

300

*MODEL===========================================================

301

302

MODELS

303

304

CGE5 Open-economy model

305

/ALL/

306

;

307

308

*SOCIAL ACCOUNTING MATRIX========================================

309

310

TABLE SAM(AC,ACP) social accounting matrix

311

312

AGR-A

NAGR-A

AGR-C

NAGR-C

LAB

CAP

313

AGR-A

279

314

NAGR-A

394

315

AGR-C

84

55

316

NAGR-C

50

99

317

LAB

72

105

318

CAP

73

135

319

U-HHD

95

125

320

R-HHD

82

83

321

GOV

322

S-I

323

YTAX

324

STAX

10

20

325

TAR

39

326

ROW

105

327

328

+

U-HHD

R-HHD

GOV

S-I

YTAX

STAX

TAR

ROW

329

AGR-A

330

NAGR-A

331

AGR-C

30

49

13

28

30

332

NAGR-C

165

92

67

85

333

LAB

334

CAP

335

U-HHD

25

40

336

R-HHD

5

16

337

GOV

25

30

39

15

338

S-I

70

40

-1

4

339

YTAX

20

5

340

;

341

342

PARAMETER

343

tdiff(AC) column minus row total for account ac;

344

SAM('TOTAL',ACNTP)

= SUM(ACNT, SAM(ACNT,ACNTP));

345

SAM(ACNT,'TOTAL')

= SUM(ACNTP, SAM(ACNT,ACNTP));

346

tdiff(ACNT)

= SAM('TOTAL',ACNT) - SAM(ACNT,'TOTAL');

347

348

DISPLAY SAM, tdiff;

349

350

351

*ASSIGNMENTS FOR PARAMETERS AND VARIABLES========================

352

353

PARAMETERS

354

*The following parameters are used to define initial values of

355

*model variables.

356

EG0, EXR0, FSAV0, IADJ0, MPS0(H), PA0(A), PD0(C), PE0(C), PM0(C),

357

PQ0(C), PVA0(A), PX0(C), QA0(A), QD0(C), QE0(C), QF0(F,A), QFS0(F),

358

QH0(C,H), QINT0(C,A), QINV0(C), QM0(C), QQ0(C), QX0(C), WF0(F),

359

WFDIST0(F,A), YF0(H,F), YG0, YH0(H)

360

;

361

362

363

*FACTOR EMPLOYMENT AND PRICES++++++++++

364

365

366

PARAMETERS

367

labor(A)

quantity of labor employed by activity (no. of workers)

368

/AGR-A 100, NAGR-A 50/

369

370

wfa(F,A)

wage for factor f in activity a (only for calibration)

371

costgap(F,A)

gap calibrated factor cost - SAM value (should be zero)

372

;

373

374

*Defining factor employment and supply

375

QF0('LAB',A)

= labor(A);

376

QF0('CAP',A)

= SAM('CAP',A);

377

QFS0(F)

= SUM(A, QF0(F,A));

378

379

*Computing activity-specific wage

380

wfa(F,A)

= SAM(F,A)/QF0(F,A);

381

382

*Computing average wage

383

WF0(F)

= SUM(A, SAM(F,A))/SUM(A, QF0(F,A));

384

385

*Computing wage distortion factors

386

WFDIST0(F,A)

= wfa(F,A) / WF0(F);

387

388

*Checking calibration

389

costgap(F,A)

= WF0(F)*wfdist(F,A)*QF0(F,A) - SAM(F,A);

390

391

DISPLAY wfa, costgap;

392

393

394

395

*PRICE BLOCK+++++++++++++++++++++++++++

396

397

PARAMETERS

398

sigmaq(C) elasticity of substitution bt. dom goods and imports for c

399

sigmat(C) elasticity of transformation bt. dom sales and exports for c

400

;

401

402

EXR0

= 1;

403

PA0(A)

= 1;

404

PD0(C)

= 1;

405

PE0(C)

= 1;

406

PM0(C)

= 1;

407

PX0(C)

= 1;

408

409

PVA0(A)

= SUM(F, SAM(F,A)) / (SAM(A,'TOTAL')/PA0(A));

410

411

tq(C)

= SAM('STAX',C)

412

/ (SAM('TAR',C) + SAM('ROW',C) + SUM(A, SAM(A,C))

413

- SAM(C,'ROW') );

414

PQ0(C)

= 1 + tq(C);

415

416

QA0(A)

= SAM('TOTAL',A)/PA0(A);

417

QD0(C)

= (SUM(A, SAM(A,C)) - SAM(C,'ROW'))/PD0(C);

418

QE0(C)

= SAM(C,'ROW')/PE0(C);

419

QM0(C)

= (SAM('ROW',C) + SAM('TAR',C))/PM0(C);

420

QQ0(C)

= (SAM('TOTAL',C) - SAM(C,'ROW'))/PQ0(C);

421

QX0(C)

= SUM(A, SAM(A,C))/PX0(C);

422

423

ica(C,A)

= (SAM(C,A)/PQ0(C)) / QA0(A);

424

theta(A,C)

= (SAM(A,C)/PX0(C)) / QA0(A);

425

426

te(C)

= 0;

427

pwe(C)

= PE0(C)/((1 + te(C))*EXR0);

428

429

tm(C)$CM(C)

= SAM('TAR',C)/SAM('ROW',C);

430

pwm(C)$CM(C)

= PM0(C) / ( EXR0*(1 + tm(C)) );

431

432

433

*PRODUCTION AND COMMODITY BLOCK++++++++

434

435

QINT0(C,A)

= SAM(C,A)/PQ0(C);

436

437

alpha(F,A)

= SAM(F,A) / SUM(FP, SAM(FP,A));

438

ad(A)

= QA0(A) / PROD(F, QF0(F,A)**alpha(F,A));

439

440

sigmat(C)

= 2.0;

441

sigmaq(C)

= 0.7;

442

rhot(C)

= 1/sigmat(C) + 1;

443

rhoq(C)

= 1/sigmaq(C) - 1;

444

445

deltat(C)$CE(C)

= 1/(1 + (PD0(C)/PE0(C))*(QE0(C)/QD0(C))**(rhot(C)-1));

446

447

at(C)$CE(C)

= QX0(C) / ( deltat(C)*QE0(C)**rhot(C)

448

+ (1-deltat(C))*QD0(C)**rhot(C) )**(1/rhot(C));

449

450

deltaq(C)$CM(C)

= 1/(1 + (PD0(C)/PM0(C))*(QD0(C)/QM0(C))**(1+rhoq(C)));

451

452

aq(C)$CM(C)

= QQ0(C) / (deltaq(C)*QM0(C)**(-rhoq(C))

453

+ (1-deltaq(C))*QD0(C)**(-rhoq(C)))**(-1/rhoq(C));

454

455

456

*INSTITUTION BLOCK+++++++++++++++++++++

457

458

EG0

= SAM('TOTAL','GOV') - SAM('S-I','GOV');

459

FSAV0

= SAM('S-I','ROW')/EXR0;

460

IADJ0

= 1;

461

MPS0(H)

= SAM('S-I',H) / (SAM('TOTAL',H) - SAM('YTAX',H));

462

QH0(C,H)

= SAM(C,H)/PQ0(C);

463

QINV0(C)

= SAM(C,'S-I')/PQ0(C);

464

YF0(H,F)

= SAM(H,F);

465

YG0

= SAM('GOV','TOTAL');

466

YH0(H)

= SAM('TOTAL',H);

467

468

beta(C,H)

= SAM(C,H)/SUM(CP, SAM(CP,H));

469

qg(C)

= SAM(C,'GOV')/PQ0(C);

470

qinvbar(C)

= SAM(C,'S-I')/PQ0(C);

471

shry(H,F)

= SAM(H,F) / SAM('TOTAL',F);

472

tr(H,'GOV')

= SAM(H,'GOV');

473

tr(I,'ROW')

= SAM(I,'ROW')/EXR0;

474

ty(H)

= SAM('YTAX',H) / SAM('TOTAL',H);

475

476

477

*SYSTEM CONSTRAINT BLOCK+++++++++++++++

478

479

cwts(C)

= SUM(H, SAM(C,H)) / SUM((CP,H), SAM(CP,H));

480

cpi

= SUM(C, cwts(C)*PQ0(C));

481

482

483

*INITIALISATION==================================================

484

485

EG.L

= EG0;

486

EXR.L

= EXR0;

487

FSAV.L

= FSAV0;

488

IADJ.L

= IADJ0;

489

MPS.L(H)

= MPS0(H);

490

PA.L(A)

= PA0(A);

491

PD.L(C)

= PD0(C);

492

PE.L(C)

= PE0(C);

493

PM.L(C)

= PM0(C);

494

PQ.L(C)

= PQ0(C);

495

PVA.L(A)

= PVA0(A);

496

PX.L(C)

= PX0(C);

497

QA.L(A)

= QA0(A);

498

QD.L(C)

= QD0(C);

499

QE.L(C)

= QE0(C);

500

QF.L(F,A)

= QF0(F,A);

501

QFS.L(F)

= QFS0(F);

502

QH.L(C,H)

= QH0(C,H);

503

QINT.L(C,A)

= QINT0(C,A);

504

QINV.L(C)

= QINV0(C);

505

QM.L(C)

= QM0(C);

506

QQ.L(C)

= QQ0(C);

507

QX.L(C)

= QX0(C);

508

WF.L(F)

= WF0(F);

509

WFDIST.L(F,A)

= WFDIST0(F,A);

510

YF.L(H,F)

= YF0(H,F);

511

YG.L

= YG0;

512

YH.L(H)

= YH0(H);

513

514

*DISPLAY+++++++++++++++++++++++++++++++

515

516

517

DISPLAY

518

ad, alpha, aq, at, beta, deltaq, deltat, cpi, cwts, ica,

519

pwe, pwm, shry, theta, qg, qinvbar, rhoq,

520

rhot, te, sigmaq, sigmat, tm, tq, tr, ty,

521

522

EG.L, EXR.L, FSAV.L, IADJ.L, MPS.L, PA.L, PD.L, PE.L, PM.L,

523

PQ.L, PVA.L, PX.L, QA.L, QD.L, QE.L, QF.L, QFS.L, QH.L, QINT.L,

524

QINV.L, QM.L, QQ.L, QX.L, WF.L, WFDIST.L, YF.L, YG.L, YH.L

525

;

526

527

528

*SELECTING CLOSURES++++++++++++++++++++

529

530

*SAVINGS-INVESTMENT BALANCE

531

532

SCALAR

533

SICLOS savings-investment closure /1/

534

*Select 1 or 2

535

*if SICLOS = 1, savings is investment-driven

536

*if SICLOS = 2, investment is savings-driven

537

538

IF(SICLOS EQ 1,

539

*Investment-driven savings -- MPS('U-HHD') is flexible, permitting

540

*the savings value to adjust.

541

IADJ.FX

= IADJ0;

542

MPS.FX('R-HHD')

= MPS0('R-HHD');

543

MPS.LO('U-HHD')

= -INF;

544

MPS.UP('U-HHD')

= +INF;

545

MPS.L('U-HHD')

= MPS0('U-HHD');

546

);

547

548

IF(SICLOS EQ 2,

549

*Savings-driven investment -- IADJ is flexible, permitting

550

*investment quantities and the investment value to adjust.

551

MPS.FX(H)

= MPS0(H);

552

IADJ.LO

= -INF;

553

IADJ.UP

= +INF;

554

IADJ.L

= IADJ0;

555

);

556

557

558

*FACTOR MARKETS

559

*For each factor, fix (A + 1) quantity and-or price variables

560

561

SCALARS

562

CAPCLOS

closure for capital market /2/

563

*Select 1 or 2

564

*if CAPCLOS

= 1, capital is mobile and fully employed

565

*if CAPCLOS

= 2, capital is activity-specific and fully employed

566

567

LABCLOS

closure for labor market /2/

568

*Select 1 or 2

569

*if LABCLOS

= 1, labor is mobile and fully employed

570

*if LABCLOS

= 2, labor is mobile and unemployed (fixed wages)

571

572

573

IF(CAPCLOS EQ 1,

574

*Capital is fully employed and mobile. WF('CAP') is the market-clearing

575

*variable for the unified capital market.

576

577

WFDIST.FX('CAP',A)

= WFDIST0('CAP',A);

578

579

WF.LO('CAP')

= -INF;

580

WF.UP('CAP')

= +INF;

581

WF.L('CAP')

= WF0('CAP');

582

583

QF.LO('CAP',A)

= -INF;

584

QF.UP('CAP',A)

= +INF;

585

QF.L('CAP',A)

= QF0('CAP',A);

586

587

QFS.FX('CAP')

= QFS0('CAP');

588

);

589

590

IF(CAPCLOS EQ 2,

591

*Capital is fully employed and activity-specific.

592

*WFDIST('CAP',A) is the market-clearing variable, one for

593

*each segment of the capital market.

594

595

WFDIST.LO('CAP',A)

= -INF;

596

WFDIST.UP('CAP',A)

= +INF;

597

WFDIST.L('CAP',A)

= WFDIST0('CAP',A);

598

599

WF.FX('CAP')

= WF0('CAP');

600

601

QF.FX('CAP',A)

= QF0('CAP',A);

602

603

QFS.LO('CAP')

= -INF;

604

QFS.UP('CAP')

= +INF;

605

QFS.L('CAP')

= QFS0('CAP');

606

);

607

608

IF(LABCLOS EQ 1,

609

*Labor is fully employed and mobile. WF('LAB') is the market-clearing

610

*variable for the unified capital market.

611

612

WFDIST.FX('LAB',A)

= WFDIST0('LAB',A);

613

614

WF.LO('LAB')

= -INF;

615

WF.UP('LAB')

= +INF;

616

WF.L('LAB')

= WF0('LAB');

617

618

QF.LO('LAB',A)

= -INF;

619

QF.UP('LAB',A)

= +INF;

620

QF.L('LAB',A)

= QF0('LAB',A);

621

622

QFS.FX('LAB')

= QFS0('LAB');

623

);

624

625

IF(LABCLOS EQ 2,

626

*Labor is unemployed and mobile. For each activity, the wage,

627

*WFDIST('LAB',A)*WF('LAB'), is fixed. QFS('LAB') is the market-clearing

628

*variable for the unified labor market.

629

630

WFDIST.FX('LAB',A)

= WFDIST0('LAB',A);

631

632

WF.FX('LAB')

= WF0('LAB');

633

634

QF.LO('LAB',A)

= -INF;

635

QF.UP('LAB',A)

= +INF;

636

QF.L('LAB',A)

= QF0('LAB',A);

637

638

QFS.LO('LAB')

= -INF;

639

QFS.UP('LAB')

= +INF;

640

QFS.L('LAB')

= QFS0('LAB');

641

);

642

643

644

*THE FOREIGN EXCHANGE MARKET

645

646

SCALAR

647

ROWCLOS rest-of-world closure /1/

648

*Select 1 or 2

649

*if ROWCLOS = 1, exchange rate is flexible

650

*if ROWCLOS = 2, foreign savings is flexible

651

;

652

653

IF(ROWCLOS EQ 1,

654

*Foreign savings is fixed. A flexible exchange rate clears

655

*the current account of the balance of payments.

656

FSAV.FX

= FSAV0;

657

EXR.LO

= -INF;

658

EXR.UP

= +INF;

659

EXR.L

= EXR0;

660

);

661

662

IF(ROWCLOS EQ 2,

663

*The exchange rate is fixed. Flexible foreign savings clears

664

*the current account of the balance of payments.

665

EXR.FX

= EXR0;

666

FSAV.LO

= -INF;

667

FSAV.UP

= +INF;

668

FSAV.L

= FSAV0;

669

);

670

671

672

DISPLAY SICLOS, CAPCLOS, LABCLOS, ROWCLOS;

673

674

675

*SOLVE STATEMENT FOR BASE========================================

676

677

CGE5.HOLDFIXED = 1;

678

679

*SOLVE CGE5 USING MCP;

680

681

682

*REPORT SETUP AND BASE REPORT====================================

683

684

*SET AND PARAMETERS FOR REPORTS++++++++

685

686

687

SET

688

SIM

simulations

689

/

BASE

base simulation

690

PWEINCR

increase in agricultural export price/

691

692

ACGDP GDP items

693

/

694

GDPMP1

GDP at market prices (from spending side)

695

PRVCON

private consumption

696

GOVCON

government consumption

697

INVEST

investment

698

EXP

exports of goods and servicers

699

IMP

imports of goods and servicers

700

NITAX

net indirect taxes

701

GDPFC

GDP at factor prices

702

GDPMP2

GDP at market prices (from income side)

703

GDPGAP

gap bt alternative calculations for GDP at market prices

704

/

705

706

ACGDP1(ACGDP) components of GDP at market prices

707

/

708

PRVCON

private consumption

709

GOVCON

government consumption

710

INVEST

investment

711

EXP

exports of goods and servicers

712

IMP

imports of goods and servicers

713

/

714

715

716

PARAMETERS

717

718

PWEAGRSIM(SIM)

agr'al export price (for curr) (experiment par.)

719

PWEREP(C,SIM)

export price for commodity c (value used)

720

721

EGREP(SIM)

government expenditures

722

EXRREP(SIM)

exchange rate (dom. cur. per unit of for. cur.)

723

FSAVREP(SIM)

foreign savings (foreign currency)

724

IADJREP(SIM)

investment adjustment factor

725

MPSREP(H,SIM)

marginal (and avg) propensity to save for household h

726

PAREP(A,SIM)

price of activity a

727

PDREP(C,SIM)

domestic price of domestic output c

728

PEREP(C,SIM)

export price for c (domestic currency)

729

PMREP(C,SIM)

import price for c (domestic currency)

730

PQREP(C,SIM)

composite commodity price for c

731

PVAREP(A,SIM)

value-added price for activity a

732

PXREP(C,SIM)

producer price for commodity c

733

QAREP(A,SIM)

level of activity a

734

QDREP(C,SIM)

quantity sold domestically of domestic output c

735

QEREP(C,SIM)

quantity of exports for commodity c

736

QFREP(F,A,SIM)

demand for factor f from activity a

737

QFSREP(F,SIM)

supply of factor f for sim

738

QHREP(C,H,SIM)

consumption of commodity c by household h

739

QINTREP(C,A,SIM)

qnty of commodity c as intermed. input for activity a

740

QINVREP(C,SIM)

quantity of investment by commodity of origin c

741

QMREP(C,SIM)

quantity of imports for commodity c

742

QQREP(C,SIM)

quantity of goods supplied domestically ("composite supply")

743

QXREP(C,SIM)

quantity of domestic output of commodity c

744

WFREP(F,SIM)

average price of factor f

745

WFAREP(F,A,SIM)

price of factor f for activity a

746

WFDISTREP(F,A,SIM)

wage distortion factof for factor f in activity a

747

YFREP(H,F,SIM)

income of household h from factor f

748

YGREP(SIM)

government revenue

749

YHREP(H,SIM)

income of household h

750

WALRASREP(SIM)

dummy variable (zero at equilibrium)

751

752

GDPREP(*,SIM)

nominal GDP data

753

;

754

755

PWEAGRSIM('BASE')

= pwe('AGR-C');

756

PWEAGRSIM('PWEINCR')

= 1.25*pwe('AGR-C');

757

758

DISPLAY PWEAGRSIM;

759

760

761

LOOP(SIM,

762

763

pwe('AGR-C')

= PWEAGRSIM(SIM);

764

765

766

SOLVE CGE5 USING MCP;

767

768

769

PWEREP(CE,SIM)

= pwe(CE);

770

771

EGREP(SIM)

= EG.L;

772

EXRREP(SIM)

= EXR.L;

773

FSAVREP(SIM)

= FSAV.L;

774

IADJREP(SIM)

= IADJ.L;

775

MPSREP(H,SIM)

= MPS.L(H);

776

PAREP(A,SIM)

= PA.L(A);

777

PDREP(C,SIM)

= PD.L(C);

778

PEREP(CE,SIM)

= PE.L(CE);

779

PMREP(CM,SIM)

= PM.L(CM);

780

PQREP(C,SIM)

= PQ.L(C);

781

PVAREP(A,SIM)

= PVA.L(A);

782

PXREP(C,SIM)

= PX.L(C);

783

QAREP(A,SIM)

= QA.L(A);

784

QDREP(C,SIM)

= QD.L(C);

785

QEREP(CE,SIM)

= QE.L(CE);

786

QFREP(F,A,SIM)

= QF.L(F,A);

787

QFSREP(F,SIM)

= QFS.L(F);

788

QHREP(C,H,SIM)

= QH.L(C,H);

789

QINTREP(C,A,SIM)

= QINT.L(C,A);

790

QINVREP(C,SIM)

= QINV.L(C);

791

QMREP(CM,SIM)

= QM.L(CM);

792

QQREP(C,SIM)

= QQ.L(C);

793

QXREP(C,SIM)

= QX.L(C);

794

WFREP(F,SIM)

= WF.L(F);

795

WFAREP(F,A,SIM)

= WF.L(F)*WFDIST.L(F,A);

796

WFDISTREP(F,A,SIM)

= WFDIST.L(F,A);

797

YFREP(H,F,SIM)

= YF.L(H,F);

798

YGREP(SIM)

= YG.L;

799

YHREP(H,SIM)

= YH.L(H);

800

801

WALRASREP(SIM)

= WALRAS.L;

802

803

*GDP data

804

GDPREP('PRVCON',SIM)

= SUM((C,H), PQ.L(C)*QH.L(C,H)) ;

805

GDPREP('GOVCON',SIM)

= SUM(C, PQ.L(C)*qg(C));

806

GDPREP('INVEST',SIM)

= SUM(C, PQ.L(C)*QINV.L(C));

807

GDPREP('EXP',SIM)

= SUM(C, EXR.L*pwe(C)*QE.L(C));

808

GDPREP('IMP',SIM)

= - SUM(C, EXR.L*pwm(C)*QM.L(C));

809

GDPREP('GDPFC',SIM)

= SUM((F,A), WF.L(F)*WFDIST.L(F,A)*QF.L(F,A));

810

GDPREP('NITAX',SIM)

811

= SUM(C, tq(C)*(PD.L(C)*QD.L(C) + (PM.L(C)*QM.L(C))$CM(C)))

812

+ SUM(C$CM(C), tm(C)*EXR.L*pwm(C)*QM.L(C))

813

+ SUM(C$CE(C), te(C)*EXR.L*pwe(C)*QE.L(C));

814

815

);

816

817

*Processing GDP data

818

GDPREP('GDPMP1',SIM)

= SUM(ACGDP1, GDPREP(ACGDP1,SIM));

819

GDPREP('GDPMP2',SIM)

= GDPREP('GDPFC',SIM) + GDPREP('NITAX',SIM);

820

GDPREP('GDPGAP',SIM)

= GDPREP('GDPMP1',SIM) - GDPREP('GDPMP2',SIM);

821

822

823

OPTION

QFREP:3:1:1, QHREP:3:1:1, QINTREP:3:1:1, WFAREP:3:1:1,

824

WFAREP:3:1:1, WFDISTREP:3:1:1, YFREP:3:1:1

825

;

826

827

DISPLAY

828

PWEREP, EGREP, EXRREP, FSAVREP, IADJREP, MPSREP, PAREP, PDREP, PEREP,

829

PMREP, PQREP, PVAREP, PXREP, QAREP, QDREP, QEREP, QFREP, QFSREP, QHREP,

830

QINTREP, QINVREP, QMREP, QQREP, QXREP, WFREP, WFAREP, WFDISTREP, YFREP,

831

YGREP, YHREP, WALRASREP, GDPREP

832

;