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A Complementarity Approach to Solving Computable General Equilibrium Models

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Abstract

Computable general equilibrium (CGE) models play a central role in modern economic modeling, bearing on a wide range of important applications in international climate and trade policies, growth and development of countries, national income distribution and equality studies. We formulate a canonical CGE model as a complementarity problem and introduce CIM-EARTH, a collection of open-source extended mathematical programming (EMP) frameworks written in AMPL and C++ for automatically generating and solving the resultant complementarity problems.

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Acknowledgments

The author would like to thank the anonymous reviewer for thoughtful comments for improving this article. The work was partially completed while the author was visiting the Institute for Mathematical Sciences (IMS), National University of Singapore in December 2012. We also acknowledge SIAM’s financial support to travel to the IMS. In addition, we thank Yongyang Cai, Richard Cottle, Michael Ferris, Ian Foster, Kenneth Judd, Todd Munson, Jong-Shi Pang, Gail Pieper, Daniel Ralph, Defeng Sun, Kim-Chuan Toh, and Weichung Wang for their interest in and discussion during the development of this work. This work was supported in part by Grants from the National Science Foundation Grant SES-0951576 through the Center for Robust Decision Making on Climate and Energy Policy (RDCEP), University of Chicago.

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Authors and Affiliations

  1. NORC at the University of Chicago, Chicago, IL, USA

    Sou-Cheng Terrya Choi

  2. Illinois Institute of Technology, Chicago, IL, USA

    Sou-Cheng Terrya Choi

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  1. Sou-Cheng Terrya Choi
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Correspondence to Sou-Cheng Terrya Choi.

AMPL/PATH code

AMPL/PATH code

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Choi, SC.T. A Complementarity Approach to Solving Computable General Equilibrium Models. Comput Econ 46, 305–323 (2015). https://doi.org/10.1007/s10614-014-9462-7

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