Economy-Wide Modelling for Policy Analysis

Economy-Wide Modelling for Policy Analysis

Course Description

Economy-wide models are useful tools for investigating the effects of policies with direct and indirect feedback within an economy. These models are based on economic theories and supported by data analytics. They draw from macroeconomic and sectoral national accounts data, supply-use tables and institutional data organized in a social accounting matrix (SAM) format and are informed by empirically derived behavioural rules for consumers, producers, investors, households and governments. Economy-wide models are useful to assess “whatif” scenarios involving a variety of policies and shocks. They can shed light on the impacts of policies and shocks on employment, output, national budgets, imports and exports, and consumption patterns, among others.

This course introduces participants to the ideas and techniques of CGE modelling, and equips them to start using and adapting CGE models for their own simulations. The course combines theory, data, and application, with emphasis on hands-on modelling in GAMS.

  • Economists
  • Economic planners
  • Senior government officials
  • Development practitioners
  • Policy analysts
  • Academics
  • Economic researchers and practitioners who wish to conduct rigorous scientific economy-wide analyses of economic shocks and policies
  • Economists needing background in order to work with, or understand results from, a typical CGE model

The course helps participants:


  • understand theories that underlie typical CGE models
  • have a good understanding of what a CGE model is, and the types of problems for which they can be useful
  • understand the general functioning and capabilities of CGE models
  • have an understanding of the structure of standard CGE models
  • acquire knowledge of practical examples of the data on which CGEs are built
  • run CGE simulations using the GAMS solution software
  • develop enough skills in GAMS programming to begin modifying existing models to suit own purposes
  • interpret and present CGE simulation results in a comprehensive manner
  • Introduction to general equilibrium modelling
  • The theory underlying CGE models
  • Discussion of issues involved in using CGE models such as the analysis of public finance, infrastructure, trade, regulation and environmental economics
  • Overview of the basic tasks in CGE based analysis
  • Introduction to GAMS
  • Representation of CGE models in GAMS notation
  • Data requirements for a typical CGE model
  • Social Accounting Matrix (SAM), parameters and elasticities
  • Checking that equations and data are implemented correctly in the model
  • GAMS computing exercises
  • Understanding CGE model closures
  • Formulating exogenous scenarios
  • Computing simulations for policy analysis
  • Practical modelling exercises
  • Interpreting CGE modelling results
  • Reporting results
  • Various applications with special emphasis on the economic interpretation of results
  • Discussion of advanced CGE modelling topics

The training approach is highly interactive. It uses a mixture of presentations by the facilitator and by participant(s), group or individual exercises, use of case studies and role plays. These proven learning techniques enhance understanding and retention of covered issues.