Introducing more flexible modelling of regional household consumption and saving behaviour into the dynamic GTAP model

Date

2019

Authors

Gretton, Paul

Journal Title

Journal ISSN

Volume Title

Publisher

University of Warsaw

Abstract

A dynamic version of the GTAP model of the global economy became available in 2012. The dynamic version known as GDyn, introduced partial adjustment mechanisms for capital accumulation and a dynamic accounting of capital-finance and related income flows between regional households and firms, and a global trust. This paper builds on this original work by including a revised modelling of investment and capital-finance flows to reach a long-run equilibrium in which model rates of return are equal and stable over time. This paper then further adds to the capabilities of the GDyn model by: (i) relaxing the assumption of fixed shares in the consumption-saving decisions of national households; and (ii) providing for the inclusion of exogenously determined changes in national consumption-saving choices. The revised model — termed GDyn-FS — is used to: infuse forecast reductions in saving as a proportion of domestic income for China in a model base line; and, against this base line, simulate a decline in the willingness to invest in a medium-sized open economy.

Description

Keywords

Economic Growth, Dynamic Base Lines, Trade Policy Analysis

Citation

Source

Challenges to Global, Social, and Economic Growth

Type

Conference paper

Book Title

Entity type

Access Statement

Free Access via publisher website

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DOI

Restricted until

2099-12-31

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