A regional computable general equilibrium model for Guatemala: Modeling exogenous shocks and policy alternatives
In this paper we develop a dynamic regional computable general equilibrium (CGE) model for Guatemala that incorporates regional disaggregated sectors for agriculture. The model is designed to be useful as a development tool for determining the effects of regional investments intended to reduce regio...
| Autores principales: | , |
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| Formato: | Artículo preliminar |
| Lenguaje: | Inglés |
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International Food Policy Research Institute
2011
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| Acceso en línea: | https://hdl.handle.net/10568/154282 |
| _version_ | 1855517373084205056 |
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| author | Morley, Samuel Piñeiro, Valeria |
| author_browse | Morley, Samuel Piñeiro, Valeria |
| author_facet | Morley, Samuel Piñeiro, Valeria |
| author_sort | Morley, Samuel |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | In this paper we develop a dynamic regional computable general equilibrium (CGE) model for Guatemala that incorporates regional disaggregated sectors for agriculture. The model is designed to be useful as a development tool for determining the effects of regional investments intended to reduce regional poverty and also to explore policy options to deal with a number of macro and balance-of-payments issues. Our model extends previous modeling work on Guatemala in several ways. First, it develops an updated regional social accounting matrix (SAM) for 2008, coupled with an updated CGE. Second, the CGE is a recursive dynamic model that incorporates unemployment in the short run. Most CGE models are not useful for short-run analysis because they are comparative static models that assume full employment. We specify a fixed minimum wage and an informal sector and use a recursive dynamic framework to solve for the short-run adjustment process that occurs as the economy responds to shocks. Second, the model is regional, permitting us to examine the impact of sectoral development policies, particularly those focused on agriculture. Guatemala has one of the lowest investment rates in Latin America. We show that if the investment share is raised by 4percent over five years, the rate of growth of the economy rises by about .6 percentage points. Guatemala is also quite sensitive to external macro disturbances. Our dynamic model gives a first approximation of the timing and nature of the adjustment over the ten years following various macro disturbances. We show that after ten years most of these shocks are absorbed by changes in the real exchange rate and the composition of output rather than the rate of growth of output. Negative shocks cause a real devaluation and a shift from consumption and non-tradables and towards exports and tradable goods. An important empirical question is whether the adjustment toward the traded goods sector is as flexible as the underlying elasticities in the model imply. |
| format | Artículo preliminar |
| id | CGSpace154282 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2011 |
| publishDateRange | 2011 |
| publishDateSort | 2011 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1542822025-11-06T05:27:05Z A regional computable general equilibrium model for Guatemala: Modeling exogenous shocks and policy alternatives Morley, Samuel Piñeiro, Valeria economic development gross national product investment income exports agriculture analysis social analysis computable general equilibrium models shock In this paper we develop a dynamic regional computable general equilibrium (CGE) model for Guatemala that incorporates regional disaggregated sectors for agriculture. The model is designed to be useful as a development tool for determining the effects of regional investments intended to reduce regional poverty and also to explore policy options to deal with a number of macro and balance-of-payments issues. Our model extends previous modeling work on Guatemala in several ways. First, it develops an updated regional social accounting matrix (SAM) for 2008, coupled with an updated CGE. Second, the CGE is a recursive dynamic model that incorporates unemployment in the short run. Most CGE models are not useful for short-run analysis because they are comparative static models that assume full employment. We specify a fixed minimum wage and an informal sector and use a recursive dynamic framework to solve for the short-run adjustment process that occurs as the economy responds to shocks. Second, the model is regional, permitting us to examine the impact of sectoral development policies, particularly those focused on agriculture. Guatemala has one of the lowest investment rates in Latin America. We show that if the investment share is raised by 4percent over five years, the rate of growth of the economy rises by about .6 percentage points. Guatemala is also quite sensitive to external macro disturbances. Our dynamic model gives a first approximation of the timing and nature of the adjustment over the ten years following various macro disturbances. We show that after ten years most of these shocks are absorbed by changes in the real exchange rate and the composition of output rather than the rate of growth of output. Negative shocks cause a real devaluation and a shift from consumption and non-tradables and towards exports and tradable goods. An important empirical question is whether the adjustment toward the traded goods sector is as flexible as the underlying elasticities in the model imply. 2011 2024-10-01T14:00:36Z 2024-10-01T14:00:36Z Working Paper https://hdl.handle.net/10568/154282 en https://hdl.handle.net/10568/153058 https://hdl.handle.net/10568/154302 Open Access application/pdf International Food Policy Research Institute Morley, Samuel; Piñeiro, Valeria. 2011. A regional computable general equilibrium model for Guatemala: Modeling exogenous shocks and policy alternatives. IFPRI Discussion Paper 1137. https://hdl.handle.net/10568/154282 |
| spellingShingle | economic development gross national product investment income exports agriculture analysis social analysis computable general equilibrium models shock Morley, Samuel Piñeiro, Valeria A regional computable general equilibrium model for Guatemala: Modeling exogenous shocks and policy alternatives |
| title | A regional computable general equilibrium model for Guatemala: Modeling exogenous shocks and policy alternatives |
| title_full | A regional computable general equilibrium model for Guatemala: Modeling exogenous shocks and policy alternatives |
| title_fullStr | A regional computable general equilibrium model for Guatemala: Modeling exogenous shocks and policy alternatives |
| title_full_unstemmed | A regional computable general equilibrium model for Guatemala: Modeling exogenous shocks and policy alternatives |
| title_short | A regional computable general equilibrium model for Guatemala: Modeling exogenous shocks and policy alternatives |
| title_sort | regional computable general equilibrium model for guatemala modeling exogenous shocks and policy alternatives |
| topic | economic development gross national product investment income exports agriculture analysis social analysis computable general equilibrium models shock |
| url | https://hdl.handle.net/10568/154282 |
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