Special course of PhD students: Input-Output and Computational General Equilibrium Models for Trade Policy Modeling

PhD course on Input-Output and Computational General Equilibrium Models for Trade Policy Modeling 

ECTS: 4 ECTs

Lecturers
Eddy Bekkers and Patrick Tomberger

Dates
June 26 – 30, July 3 – July 7, 2023

Audience
The course is intended for PhD students. A limited number of people with relevant professional or academic interest may be also admitted. 

Course description
The goal of the course is to familiarize students with the tools employed to conduct applied general modelling experiments and to teach students how to conduct trade policy simulations at an introductory level employing computable general equilibrium (CGE)-models. CGE-models are applied to a wide range of policy questions, in particular trade policy questions. However, they are also the main tool to analyse the economics of climate change policy.  

This course contains four parts. The first one focuses on the basics of input-output matrices and their extensions to multi-region/inter-country input-output (MRIO/ICIO) tables. This part will be complemented by a discussion of recent applications of the MRIO framework to measure trade in value added and to construct environmental footprints. It will culminate into a discussion on how introducing different institutional accounts (household, firms, the government, savings/investment, rest of the Word) in the input-output framework can be extended to create a social accounting matrix (SAM), which constitute the data basis for applied, or computable general equilibrium models (AGE/CGE), the subject of the second emphasis of this course.

The second part deals with a general introduction to AGE/CGE models, followed by theoretical and hands-on sessions where we analyze the economic effects of several policy measures such as changes in national or international shocks in such models. We will work with the AGE/CGE model developed and maintained by the global trade analysis project (GTAP).  

In the third part, the students will be introduced more intensively into the theoretical structure of GTAP and learn how to implement trade policy shocks in RUNGTAP/GEMPACK and interpret the results. This part will focus on applying the modelling tools to practical policy experiments in trade policy and also development.   

The fourth part of the course contains an introduction to recursive dynamic CGE modelling working with the WTO Global Trade Model in the software RunDynam.  

The course concludes with a group assignment to calculate the macroeconomic and trade effects of a trade policy experiment.