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This presentation describes the basic features and characteristics of the GEM-E3. (General Equilibrium Model for Energy-Economy-Environment interactions). The model has been developed as a multinational collaboration project, partly funded by the Commission of the European Communities1, DG Research, 5th.
Understanding a Computable General Equilibrium Model. A CGE model is one of the most rigorous, cutting-edge quantitative methods to evaluate the impact of economic and policy shocks -particularly policy reforms- in the economy as a whole. Because of its nature, this tool is significantly useful for policy design.
Alternatively, if agents' expectations depend on the future state of the economy, it becomes necessary to solve for all periods simultaneously, leading to full multi-period dynamic CGE models. Within the latter group dynamic stochastic general equilibrium models
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General equilibrium theory contrasts to the theory of partial equilibrium, which only analyzes single markets. General equilibrium theory both studies economies using the model of equilibrium pricing and seeks to determine in which circumstances the assumptions of general equilibrium will hold. The theory dates to the
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Antonio M. Borges is Professor of Economics at INSEAD; he has prepared this paper under contract with the. OECD Economics and Statistics Department. Page 2. Page 3. Page 4. Page 5. The work of Whalley (1980; 1982) in international trade policy also contributed interesting and important results. Assessingthe
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