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This paper gives an introduction to Computable General Equilibrium
(CGE) modelling, and presents an application of the technique to the analysis of the Europe Agreements between the EU and Hungary,
Poland and the former Czechoslovakia. The main purpose of the paper is to illustrate the method, rather than present a state-of-the-art analysis.
The CGE-approach makes it possible to pursue the analysis further than possible with analytic methods, and it can yield qualitative as well as quantitative results. A model is presented, and it is used to analyse the consequences of the Europe Agreements as well as the sensitivity of the results to important assumptions. The analysis shows only modest long run gains for the Eastern European countries (around 1-2% of
GDP per year), and very small gains for the EU countries. The sensitivity analysis shows that the results are relatively robust to the way the model is calibrated.
*
This paper is a shortened and edited version of my Master’s Thesis “Modelling Regional Integration using CGE-models” from the Institute of Economics at the University of Copenhagen (Petersen, 1996). I would like to thank my supervisor Hans
Keiding for guidance with the thesis, as well as useful comments on this paper. Furthermore I would like to thank Peter Trier for helpful comments on an earlier version of this paper. However, the usual disclaimer applies. E-mail: twp@dst.dk.
,QWURGXFWLRQ
This paper presents an analysis of the Europe Agreements (EA) between the EU and the Hungary,
Poland and the former Czechoslovakia (the so-called Visegrad countries). The main purpose of the paper is to demonstrate KRZ this topic can be analysed using a Computable General Equilibrium
(CGE) model, and which issues can be addressed.
NRQRPLVN ,QVWLWXW
$Q LQWURGXFWLRQ WR &*(PRGHOOLQJ
DQG DQ LOOXVWUDWLYH DSSOLFDWLRQ WR
(DVWHUQ (XURSHDQ ,QWHJUDWLRQ
ZLWK WKH (8
7RNH :DUG 3HWHUVHQ
6HSWHPEHU
$EVWUDFW
This paper gives an introduction to Computable General Equilibrium
(CGE) modelling, and presents an application of the technique to the analysis of the Europe Agreements between the EU and Hungary,
Poland and the former Czechoslovakia. The main purpose of the paper is to illustrate the method, rather than present a state-of-the-art analysis.
The CGE-approach makes it possible to pursue the analysis further than possible with analytic methods, and it can yield qualitative as well as quantitative results. A model is presented, and it is used to analyse the consequences of the Europe Agreements as well as the sensitivity of the results to important assumptions. The analysis shows only modest long run gains for the Eastern European countries (around 1-2% of
GDP per year), and very small gains for the EU countries. The sensitivity analysis shows that the results are relatively robust to the way the model is calibrated.
*
This paper is a shortened and edited version of my Master’s Thesis “Modelling Regional Integration using CGE-models” from the Institute of Economics at the University of Copenhagen (Petersen, 1996). I would like to thank my supervisor Hans
Keiding for guidance with the thesis, as well as useful comments on this paper. Furthermore I would like to thank Peter Trier for helpful comments on an earlier version of this paper. However, the usual disclaimer applies. E-mail: twp@dst.dk.
,QWURGXFWLRQ
This paper presents an analysis of the Europe Agreements (EA) between the EU and the Hungary,
Poland and the former Czechoslovakia (the so-called Visegrad countries). The main purpose of the paper is to demonstrate KRZ this topic can be analysed using a Computable General Equilibrium
(CGE) model, and which issues can be addressed.