Computable General Equilibrium Models: Training ...

Computable General Equilibrium

Models: Training Opportunities and

Skill Development

Scott McDonald (Humboldt)

&

Karen Thierfelder (USNA)

UNFCCC, Bonn, 2018 1© cgemod

Outline

• Introduction

• Types of User

• Training Decisions

– Software

– Models

• Providers of CGE Training

• Outcomes

• Support and Mentoring

• Concluding Comments


Introduction

• Excess demand for CGE analyses– Why?

• Skill set: economics, coding, data, policy, ……..

• Types of Users– Modellers – ‘those who change the behaviours in models’

– Users – ‘those who code and interpret experiments’

– Clients – ‘those who commission CGE analyses’

• Training Decisions– Software

– Models• Global

• Single country

• CGE Training

• Support


CGE Models and SAMs

• The data used for all CGE models can be present in a SAM format

– Transactions (pi*qij) matrix (SAM)

• Agents

– Commodities/activities

– Factors

– Institutions – household, government, enterprises, investment_saving

– Taxes

» Active and potential

– Rest of the World

– Satellite Accounts

• Labour quantities

• Energy quantities and emissions

• ……

– Alternative (Green/Brown) TechnologiesUNFCCC, Bonn, 2018 4© cgemod

Data and model are separable

CGE Model Components

• Markets – prices and quantities– Commodities/Activities

– Factors

– Trade

• Competition– Perfect/Imperfect, e.g., Cournot, monopolistic competition, …..

• Technologies

• Preferences

• Market clearing conditions– Without restrictions – prices

– With restrictions – quantities, etc.

• Macroeconomic closures– From new classical to structuralist


Flexible price models

CGE Models and Time

• Comparative static– Typical constraints

• Factor supplies fixed

• Technology fixed

• Time path of shock does not (overly) determine the outcome

• Recursive dynamic– Backward looking – adjustments based on past outcomes

• Partial adjustment mechanisms

– ‘Baseline’ needs to be defined• Technologies

• Factor supples

• Forward-looking dynamic– Full - ‘Ramsey saving model’

– With terminal constraints


Types of Users

‘Types’

• ‘Modellers’

– The developers of models

• Skill set: advanced economics and programming

• ‘Users’

– The Users and Adapters of models

• Users: coding, data and interpreting experiments

• Adapter: modifying behavioural relationships

• ‘Clients’

– Good clients

• An understanding of the strengths, weaknesses and limitations of CGE models

– Strong economics and understanding of policy

– Poor clients

• Those seeking results that confirm their priors

– *******!!

Experience

• ‘Modellers’

– 10+ years

– PhD (Econ, OR, ..)

– ‘blinkers’

• ‘Users’

– MSc/PhD (Econ)

– 3+ years

– proto modellers

• ‘Clients

– MSc/PhD (Econ)

– c10 years

– knowledge/insight


Training Decisions - SoftwareGAMS

• General Algebraic Modeling

System

– GAMS Corp (USA & Germany)

• General

– Optimisation problems

• Strengths

• Weaknesses

• User base

GEMPACK

• General Equilibrium Modeling

PACKage

– KPSoft and CoPS (Australia)

• Specialist

– CGE problems

• Strengths

• Weaknesses

• User base


CGE models can be done equally well in

GAMS or GEMPACK

Arguments about solution algorithms are futile

Training Decisions - ModelsGAMS

• Global Models

– GTAPnGAMS

– LINKAGE

– GEME3

– E3ME

– GLOBE/GLOBE_EN /…

– PEP

• Single Country

– IFPRI Standard

– STAGE/STAGE_EN/….

– PEP

GEMPACK

• Global Models

– GTAP/GTAP_E

– MyGTAP

– MAGNET

• Single Country

– ORANI/MONASH/TERM

family


Global and Single country model families:

PEP

GLOBE & STAGE (cgemod)

CGE Training - GEMPACKGLOBAL

GTAP (USA)

www.gtap.agecon.purdue.edu

• GTAP model

• Training– Online

• GTAP101

• GTAP PTA

– On site• Annual Short Course

• Dynamic Short Course

SINGLE Country

CoPS (Australia)

www.vu.edu.au/cops

• TERM and ORANI models

• Training

– On site

• Introductory Practical GE course

• Various Dynamic courses

• Various GEMPACK courses


CGE Training – GAMS (PEP)GLOBAL

PEP (Canada)

www.pep-net.org

• No Training identified

SINGLE Country

PEP (Canada)

www.pep-net.org

• PEP Standard Model

• Training

– On line

• Introduction to CGE modelling

(NEW)


CGE Training – GAMS (EcoMod)GLOBAL

EcoMod (Belgium)

ecomod.net

• NO models identified

• Training (??)

– On line

• Trade Policy modelling (??)

SINGLE Country

EcoMod (Belgium)

ecomod.net

• NO models identified

• Training– On line and On site (inter alia)

• Practical GE modelling

• Energy & Environment GE Modelling

• Advanced Techniques in GE Modelling


CGE Training – GAMS (cgemod)GLOBAL

cgemod (USA & UK)

www.cgemod.org.uk/global_cge.html

• GLOBE models

• Training

– Online

• Practical CGE Modelling

• Intermediate CGE Modelling

– On site

• Advanced Training/Support

SINGLE Country

cgemod (USA & UK)

www.cgemod.org.uk/single_int.html

• STAGE models

• Training

– Online

• Practical CGE Modelling

• Intermediate CGE Modelling

– On site

• Advanced Training/Support


CGE Training – GAMS

• The GAMS corporation provides a list of courses using GAMS

www.gams.com


Outcomes from ‘Short’ Courses

YES

• Better client

– More practice at interpreting model results needed

• Basic user

– Mentoring and a lot more practice

• Trainee modeller

– The next 3 years of learning and practicing will tell

NO

• Good client

– Experience and practice will be needed

• Good user

– ‘Rome was not built in a week’

• Modeller

– Why do you think there is excess demand?


From a good programme of training

ALL available (short) courses can only provide a start.

Course graduates need a lot of time after the courses to

embed the materials.

Support and Mentoring

• Line managers

– A short course is NOT enough

– Allocate time (2 months +) for a post course project

– Arrange mentoring

• In-house mentors


• Ideal – IF they are experienced

• Useless (or worse) – IF they are NOT experienced

• External mentors


– Cost


Concluding Comments

• Do not expect too much

• Separate research projects and training

– Employ teachers to teach

– Employ researcher to research

– Employ consultants to consult

• Choose courses that relate to the selected model family – chicken and the egg

• Allocate (lots of) time to post course practice

– Set up a project BEFORE the course period

• Plan the provision of support and mentoring


‘Rome was not built in one day’

The End


Computable General Equilibrium Models: Training ...

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