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Module (6 Credits)

Specification and Simulation of General Equilibrium Models

Name in diploma supplement
Specification and Simulation of General Equilibrium Models
Responsible
Admission criteria
See exam regulations.
Workload
180 hours of student workload, in detail:
  • Attendance: 45 hours
  • Preparation, follow up: 90 hours
  • Exam preparation: 45 hours
Duration
The module takes 1 semester(s).
Qualification Targets

Students

  • have a deepened understanding of computable general equilibrium models
  • master the basics of implementation of the general equilibrium models
  • are able to adopt this methodology in their independent quantitative analyses
  • can describe and interpret the results from general equilibrium models linking them to relevant theory
  • learn the programming language GAMS, the model language MCP and the meta-language MPSGE
  • understand simple basic models and their extensions
  • are able to implement the basic models independently both in MCP and MPSGE
  • can modify the given models in order to capture other situations
  • can interpret the results and link them to the relevant economic theory
Relevance

The content of the course is useful in many scientific institutions, business consultancy, multinational firms, international organizations, economic research institutes and ministries. The theory-driven step-by-step specification of the models is a prerequisite for understanding economic research in this field and thus a basis for conducting independent research. 

Module Exam

The module-related examination is performed by a written test (usually 60-90 minutes).

Usage in different degree programs
  • BWL-EaF-Ma-2015 Wahlpflichtbereich 1st-3rd Sem, Elective
  • Mathe-Ma-2013 Anwendungsfach "Wirtschaftswissenschaften" Schwerpunkt "VWL-M I" 1.4st Sem, Elective
  • Mathe-Ma-2013 Anwendungsfach "Wirtschaftswissenschaften" Schwerpunkt "VWL-M II" 1.4st Sem, Elective
  • VWL-Ma-2009-V2013 Wahlpflichtbereich I 1st-3rd Sem, Elective
  • WiMathe-Ma-2013 VWL-M I 1st-4th Sem, Elective
  • WiMathe-Ma-2013 VWL-M II 1st-4th Sem, Elective
Elements
Name in diploma supplement
General Equilibrium Models of Open Economies
Organisational Unit
Lecturers
SPW
2
Language
English
Cycle
every second winter semester
Participants at most
16
Preliminary knowledge

Advanced knowledge in the field of international trade

Abstract

The course provides deep knowledge of design and implementation of Computable General Equilibrium (CGE) models. 

Qualification Targets

Students

  • have a deepened understanding of computable general equilibrium models
  • master the basics of implementation of the general equilibrium models
  • are able to adopt this methodology in their independent quantitative analyses
  • can describe and interpret the results from general equilibrium models linking them to relevant theory
Contents
  • Introduction to computable general equilibrium analysis
  • Comparative static analysis of a closed economy with two goods and two production factors
  • Extensions of the basicmodel for a closed economy with heterogeneous labor, heterogeneous households and endogenous labor supply
  • Models of open economies: extension of the basic model for an open economy with import tariffs and quotas and other trade policies
  • General equilibrium models with imperfect competition on the goods markets
Literature
  • Francois/Reinert, Applied Methods for Trade Policy Analysis;
  • Jones, The Structure of Simple General Equilibrium Models;
  • Shoven/Whalley, Applying General Equilibrium;
  • Articles from economics literature
Teaching concept

The class is held in the form of lectures. The construction and implementation of the abovementioned models is illustrated by using a special software (GAMS, „General Algebraic Modeling System“) as well as a special programming language for general equilibrium models (MPSGE, „Mathematical Programming System for General Equilibrium“).

Participants
  • BWL-EaF-Ma-2015 Wahlpflichtbereich Modul "Specification and Simulation of General Equilibrium Models " 1st-3rd Sem, Elective
  • Mathe-Ma-2013 Anwendungsfach "Wirtschaftswissenschaften" Schwerpunkt "VWL-M I" Modul "Specification and Simulation of General Equilibrium Models " 1.4st Sem, Elective
  • Mathe-Ma-2013 Anwendungsfach "Wirtschaftswissenschaften" Schwerpunkt "VWL-M II" Modul "Specification and Simulation of General Equilibrium Models " 1.4st Sem, Elective
  • VWL-Ma-2009-V2013 Wahlpflichtbereich I Modul "Specification and Simulation of General Equilibrium Models " 1st-3rd Sem, Elective
  • WiMathe-Ma-2013 VWL-M I Modul "Specification and Simulation of General Equilibrium Models " 1st-4th Sem, Elective
  • WiMathe-Ma-2013 VWL-M II Modul "Specification and Simulation of General Equilibrium Models " 1st-4th Sem, Elective
Lecture: General Equilibrium Models of Open Economies (WIWI‑C0806)
Name in diploma supplement
General Equilibrium Models of Open Economies
Organisational Unit
Lecturers
SPW
2
Language
English
Cycle
every second winter semester
Participants at most
16
Abstract

This tutorial provides students with programming experience while constructing and implementing the computable general equilibrium models. 

Qualification Targets

Students

  • learn the programming language GAMS, the model language MCP and the meta-language MPSGE
  • understand simple basic models and their extensions
  • are able to implement the basic models independently both in MCP and MPSGE
  • can modify the given models in order to capture other situations
  • can interpret the results and link them to the relevant economic theory
Contents
  • Introduction to computable general equilibrium analysis
  • Comparative static analysis of closed economy with two goods and two production factors
  • Extensions of the basic model for closed economy with heterogeneous labor, heterogeneous households and endogenous labor supply
  • Models of open economies: extension of the basic model for open economy with import tariffs and quotas as well as with international mobile capital
  • General equilibrium models with imperfect competition on the goods markets
Literature

Markusen, J. R., The Markusen Examples, www.mpsge.org

Participants
  • BWL-EaF-Ma-2015 Wahlpflichtbereich Modul "Specification and Simulation of General Equilibrium Models " 1st-3rd Sem, Elective
  • Mathe-Ma-2013 Anwendungsfach "Wirtschaftswissenschaften" Schwerpunkt "VWL-M I" Modul "Specification and Simulation of General Equilibrium Models " 1.4st Sem, Elective
  • Mathe-Ma-2013 Anwendungsfach "Wirtschaftswissenschaften" Schwerpunkt "VWL-M II" Modul "Specification and Simulation of General Equilibrium Models " 1.4st Sem, Elective
  • VWL-Ma-2009-V2013 Wahlpflichtbereich I Modul "Specification and Simulation of General Equilibrium Models " 1st-3rd Sem, Elective
  • WiMathe-Ma-2013 VWL-M I Modul "Specification and Simulation of General Equilibrium Models " 1st-4th Sem, Elective
  • WiMathe-Ma-2013 VWL-M II Modul "Specification and Simulation of General Equilibrium Models " 1st-4th Sem, Elective
Exercise: General Equilibrium Models of Open Economies (WIWI‑C0807)
Module: Specification and Simulation of General Equilibrium Models (WIWI‑M0661)