How robust is applied general equilibrium analysis?

Harrison, Glenn W.; Jones, Richard; Kimbell, Larry J.; Wigle, Randall

doi:10.1016/0161-8938(93)90024-k

Cited by 96 publications

(37 citation statements)

References 19 publications

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“…The consistently small estimated gains in constant returns to scale models came to be known as "the Harberger constant." While some estimates with increasing returns to scale models (such as Harris, 1984) have been larger (up to 10 percent of GDP), these estimates have been more controversial, often based on regime switching (see Harrison, Jones et al, 1993;and Harrison, Rutherford and Tarr, 1997a). In our view, the results are less than convincing for a strong version of the paradigm.…”

Section: )contrasting

confidence: 51%

Trade Liberalization and Endogenous Growth in a Small Open Economy: A Quantitative Assessment

Rutherford

1999

Policy Research Working Papers

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Section: )contrasting

confidence: 51%

Trade Liberalization and Endogenous Growth in a Small Open Economy: A Quantitative Assessment

Rutherford

1999

Policy Research Working Papers

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“…In contrast to our previous work, we now particularly, and in full extent, focus on the sensitivity of our results regarding changes in the most relevant central model parameters. Thereby, we follow the suggestions by Harrison et al (1993) and Abler et al (1999), who argue that applied general equilibrium analyses should routinely be subjected to systematic sensitivity analysis, in order to capture the intrinsic uncertainties involved in the calibration of models. In many ways, our global warming robustness analysis is comparable to the natural scientific approach towards sensitivity analyses as employed by Hasselmann et al (1997) in their climate change study with a simplified structural integrated assessment model (SIAM).…”

Section: Introductionmentioning

confidence: 99%

A Sensitivity Analysis of Timing and Costs of Greenhouse Gas Emission Reductions

Gerlagh

Zwaan

2004

Climatic Change

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Abstract. This paper analyses the optimal timing and macro-economic costs of carbon emission reductions that mitigate the global average atmospheric temperature increase. We use a macro-economic model in which there are two competing energy sources, fossil-fuelled and nonfossil-fuelled. Technological change is represented endogenously through learning curves, and niche markets exist implying positive demand for the relatively expensive non-fossil-fuelled energy source. Under these conditions, with a temperature increase constraint of 2 • C, early abatement is found to be optimal, and, compared to the results of many existing top-down models, the costs of this strategy prove to be low. We perform an extensive sensitivity analysis of our results regarding the uncertainties that dominate various economic and technological modeling parameters. Uncertainties in the learning rate and the elasticity of substitution between the two different energy sources most significantly affect the robustness of our findings.

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“…Several methods have been proposed to test the uncertainty of free parameters in the CGE model (Wigle, 1991;Harrison et al, 1993). These methods can be divided into five categories: limited sensitivity analysis, conditional systematic sensitivity analysis, unconditional systematic sensitivity analysis, Bayes' method and the extremum method.…”

Section: Appendixmentioning

confidence: 99%

“Lock-in” effect of emission standard and its impact on the choice of market based instruments

Qian

Tang

2017

Energy Economics

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Abstract:A country's existing emission standard policy will lead to a "lock in" effect. When the country plans to adopt new market-based instruments to control greenhouse gas emissions, it must consider this effect as it chooses among instruments to avoid larger efficiency loss. In this paper, we find that the "lock in" effect will cause a kink point to occur on the marginal abatement cost (MAC) curve. This change of shape for the MAC curve reminds us to be cautious in choosing market-based instruments when applying Weitzman's rule. We also introduce this concept into a dynamic multi-regional computable general equilibrium (CGE) model for China and simulate MAC curves for all regions. After applying Weitzman's rule, we propose a timeline for introducing price instruments under different marginal benefit (MB) curve scenarios.

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How robust is applied general equilibrium analysis?

Cited by 96 publications

References 19 publications

Trade Liberalization and Endogenous Growth in a Small Open Economy: A Quantitative Assessment

Trade Liberalization and Endogenous Growth in a Small Open Economy: A Quantitative Assessment

A Sensitivity Analysis of Timing and Costs of Greenhouse Gas Emission Reductions

“Lock-in” effect of emission standard and its impact on the choice of market based instruments

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