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Linking global CGE models with sectoral models to generate baseline scenarios: Approaches, opportunities and pitfalls
handle: 10419/228648
When modelling medium and long-term challenges we need a reference path of economic development (the so-called baseline). Because sectoral models often offer a more fundamental understanding of future developments for specific sectors, many CGE modeling teams have adopted different kinds of linking approaches to sectoral models to generate baselines. We systematically compare and discuss approaches of linking CGE models for the baseline calibration procedure, and discuss best practices and pitfalls. We identify different types of linking approaches which we divide into a) links with partial equilibrium models, and b) links with non-economic models. These two types of linking approaches are then analyzed with respect to e.g. the degree of linkage, information exchanged, as well as compromises in aggregations and definitions. Based on this, we discuss potential drawbacks and conclude with suggestions for best practices and research recommendations.
JEL: C - Mathematical and Quantitative Methods/C.C6 - Mathematical Methods • Programming Models • Mathematical and Simulation Modeling/C.C6.C68 - Computable General Equilibrium Models, 330, ddc:330, Model linking baseline scenario, [SHS.ECO]Humanities and Social Sciences/Economics and Finance, [SDE.ES]Environmental Sciences/Environmental and Society, Computable general equilibrium models, [SHS]Humanities and Social Sciences, [SDE.ES] Environmental Sciences/Environment and Society, JEL: D - Microeconomics/D.D5 - General Equilibrium and Disequilibrium/D.D5.D58 - Computable and Other Applied General Equilibrium Models, C68, D58, [SDE.ES]Environmental Sciences/Environment and Society, [SHS.ECO] Humanities and Social Sciences/Economics and Finance, Partial equilibrium model
JEL: C - Mathematical and Quantitative Methods/C.C6 - Mathematical Methods • Programming Models • Mathematical and Simulation Modeling/C.C6.C68 - Computable General Equilibrium Models, 330, ddc:330, Model linking baseline scenario, [SHS.ECO]Humanities and Social Sciences/Economics and Finance, [SDE.ES]Environmental Sciences/Environmental and Society, Computable general equilibrium models, [SHS]Humanities and Social Sciences, [SDE.ES] Environmental Sciences/Environment and Society, JEL: D - Microeconomics/D.D5 - General Equilibrium and Disequilibrium/D.D5.D58 - Computable and Other Applied General Equilibrium Models, C68, D58, [SDE.ES]Environmental Sciences/Environment and Society, [SHS.ECO] Humanities and Social Sciences/Economics and Finance, Partial equilibrium model
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