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|Title:||Estimation of Armington elasticities in a CGE economy–energy–environment model for Europe.|
|Authors:||NÉMETH Gabriella; SZABO Laszlo; CISCAR MARTINEZ Juan Carlos|
|Citation:||ECONOMIC MODELLING vol. 28 no. 4 p. 1993-1999|
|Publisher:||ELSEVIER SCIENCE BV|
|Type:||Articles in periodicals and books|
|Abstract:||The main goal of the article is to estimate Armington elasticities of the energy and energy-intensive sectors of the GEM-E3 computable general equilibrium model. The model follows the standard two-stage budget optimisation of the consumer by first optimising between domestically produced and imported goods and, then, by country of origin. A panel data econometric framework is used here with dynamic adjustment to capture both the long and short term elasticities for the studied six aggregated sectors in Europe. The estimated long-term elasticities are in line with the literature, but higher than those used in the GEM-E3 model. The results suggest that consumer choice appears to be more price sensitive between the domestic and the composite imported goods, and amongst the importers, than already assumed in the model.|
|JRC Directorate:||Growth and Innovation|
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