| In the section | Surveys |
| Title of the article | Empirical Models of General Economic Equilibrium |
| Pages | 138-167 |
| Author 1 | Dmitriy Aleksandrovich Izotov Candidate Economics, Senior Research Fellow. Economic Research Institute FEB RAS 153 Tikhookeanskaya Street, Khabarovsk, Russia, 680042 This email address is being protected from spambots. You need JavaScript enabled to view it. |
| Abstract | The article considers possibilities and limitations of empirical models of general economic equilibrium and gives their classification. The author divides computable models of general economic equilibrium into two groups: the first one is based on a model of equilibrium prices (G. Scarf’s approach) and the second one - on a multisectorial model of economic growth (L. Johansen’s approach). The researcher also divides models of dynamic stochastic general equilibrium into two groups: the first one is based on a model of the real business cycle (F. Kydland and E. Prescott’s approach) and the second one - on a model of different behavior of firms under monopolistic competition (J. Rotemberg and M. Woodford’s approach). Within each group the study demarcates empirical models with the help of following criteria: an economy’s scale and its openness; application to current and future assessments; analyzed socio-economic phenomenon. |
| Code | 330.36.01 |
| DOI | 10.14530/se.2014.3.138-167 |
| Keywords | ♦ classification ♦ general economic equilibrium ♦ applied model of general equilibrium ♦ computable model of general equilibrium ♦ model of dynamic stochastic general equilibrium ♦ Bayesian approach ♦ external shock |
| Download | SE.2014.3.138-167.Izotov.pdf |
| For citation | Izotov D.A. Empirical Models of General Economic Equilibrium. Prostranstvennaya Ekonomika = Spatial Economics, 2014, no. 3, pp. 138-167. DOI: 10.14530/se.2014.3.138-167. (In Russian). |
| References | 1. Blaug М. Economic Theory in Retrospect. Moscow, 1994, 720 p. (In Russian). 2. Walras L. Elements of Pure Economics, Moscow, 2000, 448 p. (In Russian). 3. Makarov V.L. Computable Model of the Russian Economy. Moscow: Central Economics and Mathematics Institute RAS, 1999. 93 p. 4. Polbin A.V., Drobyshevsky S.М. Building a Dynamic Stochastic General Equilibrium Model for the Russian Economy. Moscow: Gaidar Institute for Economic Policy, 2014, 156 p. (In Russian). 5. Polterovich V.М. Crisis of Economics. Ekonomicheskaya Nauka Sovremennoy Rossii [The Economic Science of Contemporary Russia], 1998, no. 1, pp. 46–66. (In Russian). 6. Development of Methodology of Quantitative Analysis of Impact of International Treaties and Agreements on Foreign Trade and International Competitiveness of the Russian Economy: Research Report. Moscow: Centre for Economic and Financial Research (CEFIR), 2006, 162 p. Available at: http://aisup.economy.gov.ru/niokr/materials.jsp?uuid=pprtctfs000080000hckv7cqoc4fn2v8 (accessed 10 July 2014). (In Russian). 7. Adolfson M., Laseen S., Jesper L., Villani M. Are Constant Interest Rate Forecasts Modest Interventions? Evidence from an Estimated Open Economy DSGE Model of the Euro Area. Sveriges Riksbank. Working Paper Series 180. Available at: (accessed 01 August 2014). 8. Agenor P.R., Izquierdo A., Fofack H. IMMPA: A Quantitative Macroeconomic Framework for the Analysis of Poverty Reduction Strategies. The World Bank Washington D.C. June 3, 2003. Available at: (accessed 18 June 2014). 9. Aguiar A.H., Walmsley T.L. A Dynamic General Equilibrium Model of International Migration. Center for Global Trade Analysis, Purdue University, 2010, 27 p. Available at: https://www.gtap.agecon.purdue.edu/resources/download/5053.pdf (accessed 05 July 2014). 10. Alekseev A. An Application of a Computable General Equilibrium Model for the Estimation of Effects of the New Wave of the European Union Enlargement on the Russian Economy. Working Paper #BSP/2003/070. Moscow, New Economic School, 2003, 42 p. Available at: (accessed 15 June 2014). 11. Andrle M., Hledik T., Kamenik O., Vlcek J. Implementing the New Structural Model of the Czech National Bank. Working Paper 2009/2. Czech National Bank, Research Department, 2009. Available at: (accessed 11 June 2014). 12. Armington P.S. A Theory of Demand for Products Distinguished by Place of Production. Staff Papers – International Monetary Fund, 1969, vol. 16, no. 1, pp. 159–178. DOI: 10.2307/3866403 13. Arrow K.J., Debreu G. Existence of an Equilibrium for a Competitive Economy. Econometrica, 1954, vol. 22, no. 3, pp. 265–290. Available at: http://www.jstor.org/stable/1907353 (accessed 15 August 2014). 14. Baldos U.L.C., Hertel T.W. Development of a GTAP8 Land Use and Land Cover Data Base for Years 2004 and 2007. GTAP Research Memorandum, no. 23, September, 2012. Available at: https://www.gtap.agecon.purdue.edu/resources/download/6048.pdf (accessed 18 May 2014). 15. Bchir M.H., Decreux Y., Guerin J.L., Jean S. MIRAGE, a Computable General Equilibrium Model for Trade Policy Analysis. CEPII, Working Paper, no. 2002, 17 December. Available at: https://www.gtap.agecon.purdue.edu/resources/download/1256.pdf (accessed 12 July 2014). 16. Benes J., Binning A., Fukac M., Lees K., Matheson T. K.I.T.T.: Kiwi Inflation Targeting Technology, New Zealand. Reserve Bank of New Zealand, 2009. Available at: (accessed 19 June 2014). 17. Bondareva O. The Core of an N Person Game. Vestnik Leningrad University, 1962, vol. 17, no. 13, pp. 141–142. 18. Borges A.M. Applied General Equilibrium Models: An Assessment of their Usefulness for Policy Analysis. Available at: (accessed 10 June 2014). 19. Brouwer L.E.J. Uber Eineindeutige, Stetige Transformationen von Flachen in Sich. Mathematische Annalen, 1910, vol. 69, pp. 176–180. DOI: 10.1007/BF01456868 20. Brubakk L., Husebo T.A., Maih J., Olsen K., Ostnor M. Finding NEMO: Documentation of the Norwegian Economy Model. Staff Memo 2006/6, Norges Bank. Oslo, 2006. Available at: (accessed 05 May 2014). 21. Burgess S., Fernandez-Corugedo E., Groth C., Harrison R., Monti F., Theodoridis K., Waldron M. The Bank of England’s Forecasting Platform: COMPASS, MAPS, EASE and the Suite of Models. Bank of England. Working Paper 471, May 2013. Available at: (accessed 16 June 2014). 22. Cantore C., Leon-Ledesma M., McAdam P., Willman A. Shocking Stuff: Technology, Hours, and Factor Substitution. Working Paper 1278. European Central Bank, 2010. Available at: (accessed 20 March 2014). 23. Caputo R., Medina J.P., Soto C. The MAS: a DSGE Model for Chile Implementation and Forecasting. Central Bank of Chile. Structural Dynamic Macroeconomic Models in Asia Pacific Economies, Bali, Indonesia, 3–4 June 2008. Available: (accessed 17 April 2014). 24. Chappuis T., Walmsley T.L. Projections for World CGE Model Baselines. GTAP Research Memorandum, no. 22. September 2011. Available at: https://www.gtap.agecon.purdue.edu/resources/download/5625.pdf (accessed 15.05.2014). 25. Christoffel K., Coenen G., Warne A. The New Area-Wide Model of the Euro Area – 26. a Micro-Founded Open-Economy Model for Forecasting and Policy Analysis. Working Paper 944. European Central Bank, 2008. Available at: (accessed 02.06.2014). 27. Chung H.T., Kiley M.T., Laforte J.-P. Documentation of the Estimated, Dynamic, Optimization-based (EDO) Model of the U.S. Economy: 2010 Version. Finance and Economics Discussion Series Working Paper 2010-29. Board of Governors of the Federal Reserve System, 2010. Available at: (accessed 27 July 2014). 28. Danielsson A., Eliasson L., Gudmundsson M.F., Hauksson B.A., Jonsdottir R., Olafsson T.T., Petursson T.G. QMM: A Quarterly Macroeconomic Model of the Icelandic Economy. Central Bank of Iceland. Working Papers 32, December 2006. Available at: http://www.sedlabanki.is/lisalib/getfile.aspx?itemid=4910 (accessed 16 April 2014). 29. Dantzig G.B. Optimal Solution of a Dynamic Leontief Model with Substitution. Econometrica, 1955, vol. 23, no. 3, pp. 295–302. Available at: http://www.jstor.org/stable/1910385 (a ccessed 18 April 2014). 30. Decreux Y., Valin H. MIRAGE, Updated Version of the Model for Trade Policy Analysis Focus on Agriculture and Dynamics. CEPII, France. 15 October 2007. Available at: (accessed 20 May 2014). 31. Devarajan S., Go D.S. A Macroeconomic Framework for Poverty Reduction Strategy Papers: With an Application to Zambia. Africa Region. Working Paper Series, no. 38. World Book. October 2002. Available at: (accessed 10 July 2014). 32. Dorich J., Johnston M., Mendes R., Murchison S., Zhang Y. ToTEM II: An Updated Version of the Bank of Canada’s Quarterly Projection Model. Technical Report 100. Canadian Economic Analysis Department. Bank of Canada. October 2013. Available at: (accessed 01 August 2014). 33. Estrada G., Park D., Park I., Park S. ASEAN’s Free Trade Agreements with the People’s Republic of China, Japan, and the Republic of Korea: A Qualitative and Quantitative Analysis.ADB. Working Paper Series on Regional Economic Integration, no. 75, March 2011. Available at: (accessed 26 April 2014). 34. Estrada G., Park D., Park I., Park S. The PRC’s Free Trade Agreements with ASEAN, Japan, and the Republic of Korea: A Comparative Analysis / ADB. Working Paper Series on Regional Economic Integration. No. 92, January 2012. Available at: (accessed 10 April 2014). 35. Fernandez-Villaverde J. The Econometrics of DSGE Models / National Bureau of Economic Research. Working Paper No. 14677, January 2009. Available at: (accessed 28.07.2014). 36. Florian D., Montoro C. Development of MEGA-D: A DSGE Model for Policy Analysis / Banco Central de Reserva del Peru (BCRP), May 2009. Available at: https://www.frbatlanta.org/news/CONFEREN/09qampoe/montoro.pdf (accessed 17 June 2014). 37. Foure J., Benassy-Quere A., Fontagne L. The World Economy in 2050: a Tentative Picture. CEPII Working paper 2010-27, 2010. Available at: (accessed 18 May 2014). 38. Global Trade Analysis Project (GTAP). Available at: https://www.gtap.agecon.purdue.edu (accessed 15 June 2014). 39. Graeve F. The External Finance Premium and the Macroeconomy: US post-WWII Evidence. Journal of Economic Dynamics & Control, 2008, vol. 32, no. 11, pp. 3415–3440. DOI: 10.1016/j.jedc.2008.02.008 40. Harberger A.C. The Incidence of the Corporation Income Tax. Journal of Political Economy, 1962, vol. 70, no. 3, pp. 215–240. Available at: http://www.jstor.org/stable/1828856 (accessed 21 July 2014). 41. Harrison R., Nikolov K., Quinn M., Ramsay G., Scott A., Thomas R. The Bank of England Quarterly Model. Bank of England, London. 2005. Available at: http://www.bankofengland.co.uk/publications/beqm (accessed 14 May 2014). 42. Horridge M. ORANI-G: A Generic Single-Country Computable General Equilibrium Model. Centre of Policy Studies and Impact Project. Monash University, Australia, 2003. Available at: (accessed 11 June 2014). 43. Ianchovichina E., Ivanic M., Martin W. Implications of the Growth of China and India for the Other Asian Giant: Russia / Policy Research. Working Paper. No. 5075, October 2009. Available at: http://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-5075 (accessed 44. July 2014). 45. Ianchovichina E., Ivanic M., Martin W. Implications of the Growth of China and India for the Middle East and North Africa. Available at: (accessed 22 May 2014). 46. Ianchovichina E., Nicita A., Soloaga I. Trade Reform and Household Welfare: the Case of Mexico / Policy Research. Working Paper WPS2667. August, 2001. Available at: (accessed 13 June 2014). 47. Johansen L. A Multi-Sectoral Study of Economic Growth. Amsterdam: North Holland, 2nd enlarged ed., 1974. 274 p. 48. Johnson H. Optimum Tariffs and Retaliation. Review of Economic Studies, 1953, vol. 21, no. 2, pp. 142–153. DOI:: 10.2307/2296006. 49. Kawai M., Wignaraja G. Asian FTAs: Trends, Prospects, and Challenges. ADB. Economics Working Paper Series. No. 226, October 2010. Available at: (accessed 06 May 2014). 50. Kiyota K., Stern R.M. Economic Effects of a Korea-U.S. Free Trade Agreement. Korea Economic Institute. 2007, 63 p. Available at: (accessed 18 July 2014). 51. Kumhof M., Laxton D., Muir D., Mursula S. The Global Integrated Monetary and Fiscal Model (GIMF) – Theoretical Structure / IMF. Working Paper 10/34, 2010. Available at: https://www.imf.org/external/pubs/ft/wp/2010/wp1034.pdf (accessed 26 April 2014). 52. Kydland F.E., Prescott E.C. Time to Build and Aggregate Fluctuations. Econometrica, 1982, vol. 50, no. 6, pp. 1345–1370. Available at: http://www.jstor.org/stable/1913386 (accessed 11 July 2014). 53. Li C., Whalley J. Rebalancing and the Chinese VAT: Some Numerical Simulation Results. China Economic Review, 2012, vol. 23, no. 2, pp. 316–324. DOI: 10.1016/j.chieco.2011.12.002 54. Li X., Xu D. Impact of RMB Appreciation on Trade and Labor Markets of China and the USA: A Multi-Country Comparative General Equilibrium Model. China & World Economy, 2011, vol. 19, no. 2, pp. 19–39. DOI: 10.1111/j.1749-124X.2011.01233.x 55. Lofgren H., Harris R.L., Robinson S. A Standard Computable General Equilibrium (CGE) Model in GAMS. International Food Policy Research Institute. Washington, D.C. 2002. Available at: (accessed 11 April 2014). 56. Manchin M. The Economic Effects of a Russian-EU FTA. Tinbergen Institute. Discussion Paper TI 2004-131/2. Available at: (accessed 18 March 2014). 57. Mertens K., Ravn M.O. Understanding the Aggregate Effects of Anticipated and Unanticipated tax Policy Shocks. Review of Economic Dynamics, 2011, vol. 14, no. 1, pp. 27–54. DOI: 10.1016/j.red.2010.07.004 58. Mikusheva A. Estimation of Dynamic Stochastic General Equi librium Models. Quantile, 2014, no. 12, pp. 1–21. Available at: (accessed 17 April 2014). 59. Minor P., Walmsley T. MyGTAP Data Program: A Program for Customizing and Extending the GTAP Database. GTAP Working Paper, no. 79, 2013. Available at: https://www.gtap.agecon.purdue.edu/resources/download/6660.pdf (accessed 02 May 2014). 60. Murchison S., Rennison A. ToTEM: The Bank of Canada’s New Quarterly Projection Model. Technical Report 97 / Bank of Canada, 2006. Available at: (accessed 23 June 2014). 61. Paltsev S., Rutherford T., Zemnitsky A. Assessment of Marginal Excess Burden of Taxation Based on a CGE Model. Department of Economics, University of Colorado, 2000, mimeo Available at: (accessed 62. March 2014). (In Russian). 63. Park C.Y., Zhai F. Asia’s Imprint on Global Commodity Markets. ERD Working Paper, no. 90, December 2006. Available at: (accessed 25 May 2014). 64. Pesenti P. The Global Economy Model: Theoretical Framework // IMF Staff Papers, 2008, vol. 55, no. 2, pp. 243–284. Available at: https://www.imf.org/external/pubs/ft/staffp/2008/02/pdf/pesenti.pdf (accessed 19 April 2014). 65. Plummer M.G., Cheong D., Hamanaka S. Methodology for Impact Assessment of Free Trade Agreements. Mandaluyong City, Philippines. Asian Development Bank, 2010, 110 p. 66. Rattso J. Different Macroclosures of the Original Johansen Model and their Impact on Policy Evaluation. Journal of Policy Modeling, 1982, vol. 4, no. 1, pp. 85–97. DOI: 10.1016/0161-8938(82)90006-0 67. Robilliard A.S., Bourguignon F., Robinson S. Crisis and Income Distribution: A Micro-Macro Model for Indonesia, June 2001. Available at: (accessed 68. May 2014). 69. Rotemberg J.J., Woodford M. An Optimization-Based Econometric Framework for the Evaluation of Monetary Policy: Expanded Version. NBER Technical Working Paper 233, May 1998. Available at: (accessed 21 July 2014). 70. Rutherford T., Tarr D. Regional Impacts of Russia’s Accession to the WTO. World Bank, June 23, 2006. Available at: (accessed 12 June 2014). 71. Scarf H. Fixed-Point Theorems and Economic Analysis. American Scientist, 1983, vol. 71, no. 3, pp. 289–296. Available at: (accessed 12 May 2014). 72. Scarf H. The Approximation of Fixed Points of a Continuous Mapping. SIAM Journal of Applied Mathematics, 1967, vol. 15, no. 5, pp. 1328–1343. DOI:10.1137/0115116. 73. Scarf H. The Computation of Equilibrium Prices: An Exposition. Handbook of Mathematical Economics, vol. II, eds. K. Arrow, A. Kirman, Chapter 4, 1982, pp. 1007–1067. Available at: (accessed 11 August 2014). 74. Scarf H.E. Economic Equilibrium and Soviet Economic Reform. Cowles Foundation Discussion Paper 969, February 1991. Available at: (accessed 21 April 2014). 75. Shapley L.S. On Balanced Sets and Cores. Naval Research Logistics Quarterly, 1967, vol. 14, no. 4, pp. 453–460. DOI: 10.1002/nav.3800140404 76. Shoven J.B., Whalley J. Applied General Equilibrium Model of Taxation and International Trade: an Introduction and Survey. Journal of Economic Literature, 1984, 77. vol. 22, pp. 1007–1051. 78. Souza de L.V. An Initial Estimation of the Economic Effects of the Creation of the EurAsEC Customs Union on its Members. The World Bank. Economic Premise, 2011, no. 47. Available at: (accessed 26 March 2014). 79. St-Hilaire F., Whalley J. A Microconsistent Equilibrium Data Set for Canada for use in Tax Policy Analysis. Review Income and Wealth, 1983, vol. 29, no. 2, pp. 175–204. DOI: 10.1111/j.1475-4991.1983.tb00639.x 80. Taylor L., Black S.L. Practical General Equilibrium Estimation of Resource Pulls under Trade Liberalization. Economic Development Report 208. Development Research Group. Center for International Affairs Harvard University, Cambridge, Massachusetts. February 1972. Available at: (accessed 17 June 2014). 81. Taylor L., Lysy F. Vanishing Income Redistributions. Keynesian Clues about Model Surprises in the Short Run. Journal of Development Economics, 1979, vol. 6, pp. 11–29. DOI: 10.1016/0304-3878(79)90033-6 82. Thissen M. A Classification of Empirical CGE Modelling. SOM Research Report 99C01. University of Groningen. Netherlands. December 1998. Available at: (accessed 83. June 2014). 84. Walmsley T.L., Dimaranan B.V., McDougall R.A. A Base Case Scenario for the Dynamic GTAP Model, July 2000. Available at: https://www.gtap.agecon.purdue.edu/resources/download/1271.pdf (accessed 11 May 2014). 85. Wang K., Wang C., Chen J. Analysis of the Economic Impact of Different Chinese Climate Policy Options Based on a CGE Model Incorporating Endogenous Technological Change. Energy Policy, 2009, vol. 37, no. 8, pp. 2930–2940. DOI: 10.1016/j.enpol.2009.03.023 86. Yang Y. China’s Integration into the World Economy: Implications for Developing Countries. IMF. WP/03/245. December 2003, Available at: (accessed 18 July 2014). |
| Financing | |
| Date |