This workshop provides a practical guideline to CGE modeling of open economies using data of the Global Trade Analysis Project (GTAP) which includes detailed national accounts on production and consumption together with bilateral trade flows for a large number of countries. The workshop will discuss alternative approaches to study international trade in a general equilibrium framework: (i) the wide-spread Armington assumption that goods of different origin command different prices, (ii) the alternative notion of Heckscher-Ohlin that goods of different origin are homogenous, and (iii) monopolistic-competition models that are central to the new trade theories that include variety impacts through firm entry and exit, as well as selection effects in a heterogeneous-firms context based on the seminal work by Melitz. Numerical models for these complementary approaches to policy analysis of open economies will be developed and applied. Applications will consider the standard economic integration scenarios, nationalistic movements that back away from current commitments to cooperative trade, as well as bilateral tariff wars.
For model implementation and data management we use the Generalized Algebraic Modeling System (GAMS) which is a convenient model language for the development of large-scale mathematical programs and the processing of extensive datasets.
Instructors:
University of Nebraska-Lincoln, USA
University of Oldenburg, Germany
University of Duisburg-Essen, Germany
The registration deadline is August 18, 2022.
