STITLE MODEL AUTETA

sSTITLE AUTARKY WITH GOVERNMENT

: Model of a closed economy with government producing 3 goods using

2 factors owned by 2 types of househol ds .

Octaber 2016

This GAMS code was prepared by Veroni que Robichaud. This basic cGE model is

taken from Decal uwe, B., A. Martens and L. Savard (2001), " La politique

economique du deve.loppement et les modeles d'equilibre general calculable.

Une introduction ", Montreal, Presses de 1 'Université de Montreal, 524 p.

CALIBRATION

Sets derini tion

SET'S I Industries and commodl tles

AGR agriculture

services

lic administrations/

TR (T) Tradable commodi ties and industries

agre LCulture

SER ng
BNS (TR) Go0as

Aa gELculture

H Households

AL abour endowed households

CAP cap1tal endowed households

ALTAS (,3)

rame ters derlnition

PARAEET ER

A (tr)

aij (tr,

Scale parame ter (Cobb-Douglas product ion function)

Coerticient (Leontier intermediate consumptlon)

ELasticity (cobD-Douglas production tunction)

a (tr)

io (i)

lambda

mu(tr

psi (h)

hare
3nare or ComodEy E tota nveset expendtures

AVerage PEOpensyto save or tyYpe n nousenoia

n waet aX rAte on fims income

Lncome receivea

cap

apitalists

tyh (h)

v()

Direct tax rate on household h income

coetticient (Leontler - value added)

Definition of variables for the base year

Volume variables (quantities)

co (tr, h)

CIO(j)

DIO(tr, 3

DITO (tr)

INVO (tr)

KDO (tr)

KSO (tr)

LDO ()

LSO

VAO ()
XSO (j)

Consumption of commodity tr by type h households

Total intermedi ate consumption of industry j

Intermediate consumption of commodity tr in industry

Total intermediate demand for commodity tr

Final demand of commodity i for investment purposes

Industry tr demand for capital

Capital supply in industry tr

Industry i demand for labour

Total 1abour supply

Value added of industry

Output of industry i

PriceS

PO (i)

PCIO ()

PDO (tr)

PVAO ()

RO (tr)

WO

Price of commodity i (excluding taxe)

Intermediate consumption price index of industry j

Price of commodity tr (including taxe)

Price of industry j value added

Rental rate of capital in industry 3

Wage rate

Nominal variables (values)

CTHO (h)

DIVO

DTFO

DTHO (h)

GO

ITO

SFO

SGO

SHO (h)

TGO

TIO (tr)

YDHO (h)

YFO

YGO

YHO (h)

Consumption budget of type h households

Dividends

Receipts from direct taxation on firms' income

Receipts from direct taxation on household h income

Current public expenditures

Total investment

Business 3avings

Government savings

Savings of type h households

Public transfers to salaried households

Receipts from indirect tax on commodity tr

Disposable income of type h households

Business income

Government income
Income of type h househo l ds

Initial data

PARAMETER

SAM(,,,) SAM for AUTETA

SCALL GDXXRW. EXE AUTETA. xlsx par-SAM rng-MCS!Al:R18 Rdim-2 Cdim-2

SGDXIN AUTETA.gdx

SLOAD SAM

SGDXIN

Assignment ot Variabie

DIVO

ITO

SAM(AG CAP "AG,IRM)

SAMO M

SAM (' OTH', 'ACC', 'AG',h)

SAM(OTHTOTAG IRM")

SHO (h)

HO (h)

SAM(THTOTAGh)

CAMaGEAT AGGUT
-SAM('AG, GVT , 'AG', h)

DTHO (h)

DTPO

TIO (tr

sGO

SAM(AG GV AGPRM")

-SAM("AG maGGVT')

SAM ("OTH', 'ACC,'AG, 'GVT');

Por some variables in volume, we tirst assign a temporary value trom

Ehe SAM. Later on, we i1 divide this value by the correspondii ng price.

h)

SAM('I', tr, 'J', j):

SA tOHACC

IO(1 (tr,j)

LNYOTE

LuDO3

Pric

WO
computatzon ot varlanies in Volume

XSO(

For other volumes , we must first compu te the price including taxes.

tr)

= XSO (j)/PO (J)

the

a"TTO(tr) / [PO (tr) *XSO(EE) 1

+(tr)

DO (tr)

[1+tx (tr) ] *PO (tr)

Co (tE

DIO (tr,j)

- DIO (tr, j)/PDO (tr)

Calibration or otne

variab

es
LSO

KSO (t

sUM[3 LDO (J) J

KDO (tE)

(tr

(WO LDo (tr) +RO (tr) *KDo (tr) )/VAO (Er)

VAO (tr))

VAO('pub')

PVAO"Pub)

LDOPub')

WOP

SUM [tr,PDO (tr) *DIO (tr, j) 1/CIO G)

YHO (h)-DTHO (h)

YDHO (h) -SHO (h)

PCIO ()

YDHO (h)

CTHO (h)

*Production Cal1br

Opaane ters

(Cobb-Douglas and Leontief) AO (tr) *VAO (tr)irrh ** (1-alpha (tE)1

WO*LDO (tr) /{PVAO

VAO(1) /XSO 1):

CIO(G) /K.SO (j):

DIO (tr,) /cIo (j) i

pha (tr)

traipha (tr) "kDo (tr)

io()

aij (tr,1

D2StrDuton Param

gamma (tr, h)

PDO (tr)*CO(tr,h)/CTHO (h)

(YHO(cap") -DIVO}/SUM [tr, RO (tr) *KDo (tr) ]i

Lambda

SHO Ch) yDHO

psi (h)

YHO (h)

THO (h)

-DTFO/YFO:
Parameters to be displayed 1n the output tile

LSPLAYA, aipna 20, V al), gamma, pslr mu amda, yn, ytEX

*MODEL

rinition of variables

ARIABLEs

Volume variables (quantities)

Consumption of commodity tr by type h households

rotal 1ntermedate con

Cotal intermediate demand for commodity tr

Fina demand or commodity 1 tor investment purposes

Lnauy demana tor Capta

Tmdiust ry i demand for labour

Total labour supply

Value added of industry 3

C(tr,n

in industry 3

N(E

KD(EE
LS

VA

tput or industrY J

cs

Price of commodity excug .

rice of commodity tr (including taxe)

FT1ce ot industry j value added

Rental rate of capital in industry 3

industry 3

PD (tr)

FVA

*ay

al vare DVidends onSumption budget of type h households

DIV

DTF

DTH (h)

Receipts from direct taxation on firms income

Receipts from direct taxation on household h's income

Total inv

Business savingS

Sovernment av
TT

SG

SH (h)

Savings ot type h households households

TI (tr)

YDH (n)

Receipts from indirect tax on commodity tr

Disposable income of type h households

Bus lnesS 1ncome

me of type h householas

YH (h)

Other Varia4e

LEON

EXcess supply on the market tor services

Derini tion ot equations

EQUATIONS
Value added demand in industry

(Leontief)

Total intermediate consumption demand in industry 3 (Leontlet)

Cobb-Douglas between labour and capital

VAEQ (tr)

KDEO (tr)

LDPEQ

DIEQ (tr,j3

Demand for capital by industry tr

Equivalence between VA and LD tor sector POB

Lntermedlate consumptlon or commodity tr DY sector j

xSEQ (j).

cIEQ()

VA (j) -e v(j) *xs (j);

CI (3)e io (j) *x5 (i);

VA (tr) we= A(tr) *LD(tr) **alpha (tr) *xD (tr) ** (1-alpha (tr))

wLDEE e alpna (EE) FVA (EE) *VA{EE)

R(tr) KD (tr) e= (1-alpha (tr) ) *pVA (tr) *VA (tr) ;

LD("pub") =e VA('pub ');

DI (tr,j) e= aij (tr, j) *CI (i)

VAEQ (tr).

LDEQ (Er)
KDEQ (tr)..

LDPEQ.

DIEQ (tr, j)..

Income and savings

QUATIONS

Houseno

(capitalists)

Disposable income

Housenold h savings

Consumptlon Dudget

i rms

Government income

Receipts trom indirect taxation

YDHEQ( (h)

savings

SFEQ

YGEQ

TIEQ (tr)

DTHEQ (h)

Keceps ncoe axes seno1as

sGEQ

Government savings

YH("sal') e w*sUM [j, LD (j) ] +TG;

YH("°cap") e lambda * sUM [tr, R (tr) *KD (tr) ] +DIV;

YDH (h) e- YH (h)-DrR (h) i

SH n)e pSL (h) *TDH (0)

CTH h) e YDH (h) -SH (h)

YF e (1-lambda) *sUM[tr,R (tr) *KD (tr) ] i

IHSB -

HCE.

YDHEQ (h) .

SHEQ (h)..

CTHEQ (h).

sFEQ.-

YGE

IEQ (EE)

SF e= YF-DIV-DTF;

YG e

suM [tr, TI (tr) ] +sUM [h, DTH (h) ] +DTE;

XEE) *F(EE) *XS (tr)

**

DTH (h) =e tyh (h) *YH (h)

DTE tyf*YF;

DTHEQ ()

DTFEQ

sGEQ. -

YG-G-TG:

SG

Demaa

BQUATIONS

Household h consumpt ion of commodity tr

nvestment in commodity tr

Intermedlate demand tor commodity tr

INVEQ (tr)

DITE2 (E

PD (tr) *C (tr, h) =e= gamma (tr, h) *CTH (h);

PD (tr) *INv (tr) =e= mu (tr) *IT;

DIT (tr) =e= sUM[3, DI (tr, j)]:

CEg (Er, h)..

INVEQ(E)

DITEQ (tr).

PrLces

EQUATLONS

4N

CPEQ(j)

PDEQ(EE

y ana one puDLlc sector

Production costs for sector

Price of COmmodity tr including taxe

PVA ("pub" ) =e= W;

PCI (j) *CI () =e= sUM [tr, PD (tr) *DI (tr, j)]1

P(3) *X5 ()) =e= PVA () *VA (j) +PCI (j) *CI (j)

PD(tr) e= P(tr)*[l+tx (tr) ]

PVAPEQ.

PCIE2)

CPEQ(3)

PDEQ (EE) .

quzlibri um

QUATIONs
DomestC aDsopt1On

Equil1bium on the market tor public services

PEQ(bns)

PPUBE

Capital market equilibrium

nvestment-savings equii1DrLm

REQ (tr)

xS (bns) e sUM [h, C (bns, h) ]+DIT (bns) +INV (bns)

XS("pub') *P("pub') we G;

LS e SUN [3, LD (J)];

KS (tr) =e= KD (tr) ;

IT =e= sUM [h, SH (h) ] +SF+SG;

PEQ(DnS)

PPUBEQ. .

NE

REQ(EE

ITE-*

Otne

EQURTIO

Veri fication of the Walras la

WALN

LEON =e= XS("ser')-sUM (h,c('ser"',h}) -DIT("ser") -INV ( "ser");

WALRAS..

Initialisation of variables

Co(CE, n

THO (h) E

DIO(tr, 3)

1 (h)

1(tr)

DITO(E)

DIT
)

1 th)

D'TFO;

TE. .1

NV

INVO (t

KDO (tr

KSO (tr)

.1(tr)

L(tr)

1 (tr)

D. .

PCIO (j)

PDO (EI)

PVAO (J)

CI.

D.1 (tr)

VA.
sGO;

SG.1

SHO (h)

H.J (h)

1 (tr)

AO (j)

XSO

1()

A..

1(3)

.L(h)

S.

YG.1

YGO:
YHO (h)

H.. h)

CAOSUes

P(AGR) 1s the

.fx("agr') = PO('agr' y

Capi tal 1s sector spec1tic

1 Labou so

KSO(tT)

KS. tX(I)

T.e. fx

exogenous

Dividends areP

DIVO

ubiic expendi tures are exogenous

Public trans fers to householdes are exOgenous

TGO

ode eXecution

MODEL AUTETA Autarky with government /ALL/

AUTETA HOLDFIXED= l

sOLVE AUTETA USING CNS