APPLIED GENERAL EQUILIBRIUM: AN INTRODUCTION

We have observed a tendency, which we definitely disavow, consisting in developing economic models of the ‘black-box’ variety using packaged software. These so-called modelers may be able to assemble a working model but they have little or no real inkling of its inner workings or of its internal economic logic. It is of course much more costly to build a model from the base, thinking of the relevant issues and policies that merit analysis, designing the modeling blocks that are needed for a rigorous analysis of those selected issues, assembling and organizing the data, preparing the computer code, running the simulations, and finally evaluating and interpreting the results. Frankly, all this is not trivial at all. The temptation to rely on prepackaged software is there for the taking. But we believe that what characterizes a good economist is that she ought to be able to understand, and explain, all that has been done step by step and leaving nothing aside. Needless to say we do not wish to transform an economics student into a full policy analyst, it is simply too complicated a task for a monograph like this. The focus is on the economics of general equilibrium and its empirical modeling, and not so much on the programming of computer code. There are good options for programming, but we particularly like GAMS (General Algebraic Modeling System, see Brooke et al, 1988). Some examples that can be executed using the demo version of the GAMS software will be provided but be aware that this is not the place for learning GAMS. We encourage students to use the free and generously available online resources to throw themselves wholeheartedly into acquiring the basics of a programming language. The rewards, we hope, will be plentiful and will provide successful economics students with a distinctive skill that will promote their employability and will enhance the quality of their professional profile.

CARDENETE FLORES Manuel Alejandro;  GUERRA Ana-Isabel;  SANCHO Ferran; 

2013-01-29

Springer-Verlag

JRC66475

978-3-642-24745-3,   

2192-4333,   

http://www.springer.com/economics/economic,    theory/book/978-3-642-24745-3?cm_mmc=event-_-bookAuthor-_-congratulation-_-0&cm_mmc=EVENT-_-BookAuthorEmail-_-,    https://publications.jrc.ec.europa.eu/repository/handle/JRC66475,   

10.1007/978-3-642-24746-0,