Abstract
Calibration is commonly used in order to specify a numerical computable general equilibrium model. As it involves the evaluation of model parameters on the basis of a single observation, there is a concern about the reliability of the results obtained from the model. A one-sector model for the Polish economy is specified and calibrated using various years as a benchmark equilibrium. Different assumptions are also made about some elasticity parameters. The model response is examined by simulating an increase in government expenditure. The results are quite robust to the choice of the base year but very sensitive to some elasticity parameters such as trade substitution elasticities.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Armington, P. (1969), ‘A theory of demand for products distinguished by place of production’,IMF Staff Papers, 16, 159–178.
Bergman, L. (1990), ‘The development of computable general equilibrium modelling’, in Bergman, L., Jorgenson D.W and Zalai, E. (eds.)General Equilibrium Modelling and Economic Policy Analysis, Basil Blackwell, New York.
Braber, M., Cohen, S., Revesz, T. and Zolkiewski, Z. (1993), ‘Policy simulations for Poland and Hungary under fixed and flexible price regimes: A SAM-CGE confrontation’, in Cohen, S.I. (ed.)Patterns of Economic Restructuring for Eastern Europe, Avebury, Aldershot.
Breuss, F. and Tesche, J. (1993), ‘Hungary in transition: A computable general equilibrium model comparison with Austria’,Journal of Policy Modelling, 15 (5, 6), 581–624.
Brooke, A., Kendrick, D. and Meeraus, A. (1988),GAMS: A user's guide, The Scientific Press, San Francisco.
Charemza, W. (1993), ‘Economic transformation and long-run relationships: The case of Poland’,Discussion Papers in European Economic Studies, no. 93/1, University of Leicester.
Clarke, R. and Winters, L.A. (1993), ‘Energy pricing for sustainable development in China’,Department of Economics Discussion Paper, No. 93-19, University of Birmingham.
Condon, T., Dahl, H. and Devarajan, S. (1987), ‘Implementing a computable general equilibrium model on GAMS’,DRD Discussion Paper, No. 290, The World Bank.
Dervis, K., Melo, J. de and Robinson, S. (1982),General Equilibrium Models for Development Policy, Cambridge University Press, Cambridge.
Devarajan, S., Lewis, J.D. and Robinson, S. (1990), ‘Policy lessons from two-sector models’,Journal of Policy Modelling, 12 (4), 625–657.
Devarajan, S., Lewis, J.D. and Robinson, S. (1991), ‘From stylized to applied models: Building multisector CGE models for policy analysis’, mimeo.
Dewatripont, M. and Michel, G. (1987), ‘On closure rules, homogeneity and dynamics in applied general equilibrium models’,Journal of Development Economics, 26, 65–76.
Gregory, A. W. and Smith, G.W. (1990), ‘Calibration as estimation’,Econometric Reviews, 9, 57–89.
Haan, H. de (1993), ‘Supply versus demand constraints: A post-Kaleckian CGE model of the Polish economy’, in Cohen, S.I. (ed.)Patterns of Economic Restructuring for Eastern Europe, Avebury, Aldershot.
Hare, P., Revesz, T. and Zalai, E. (1993), ‘Modelling an economy in transition: Trade adjustment policies for Hungary’,Journal of Policy Modelling, 15 (5, 6), 625–652.
Harrison, G., Jones, R., Kimbell, L. and Wigle, R. (1993), ‘How robust is applied general equilibrium analysis?’,Journal of Policy Modelling, 15 (1), 99–115.
Jorgenson, D. W. (1984), ‘Econometric methods for applied general equilibrium analysis’, in Scarf, H.E. and Shoven, J.B. (eds.)Applied General Equilibrium Analysis, Cambridge University Press, Cambridge.
Kis, P., Robinson, S. and Tyson, L. (1990), ‘Computable general equilibrium models for socialist economies’, in Bergman, L., Jorgenson, D.W. and Zalai, E. (eds.)General Equilibrium Modelling and Economic Policy Analysis, Basil Blackwell, New York.
Mansur, A. and Whalley, J. (1984), ‘Numerical specification of applied general equilibrium models: estimation, calibration and data’, in Scarf, H.E. and Shoven, J.B. (eds.)Applied General Equilibrium Analysis, Cambridge University Press, Cambridge.
Orlowski, W. (1991), ‘Opcje polityki monetarnej i fiskalnej okresu przejscia do gospodarki rynkowej: Analizy z wykorzystaniem modelu rownowagi ogolnej gospodarki polskiej’, Ph.D. dissertation, University of Lodz.
Pyatt, G. and Round, J. eds. (1985),Social Accounting Matrices: A basis for planning, The World Bank, Washington.
Rattso, J. (1982), ‘Different macroclosures of the original Johansen model and their impact on policy evaluation’,Journal of Policy Modelling, 4 (1) 85–97.
Robinson, S. (1989), ‘Multisectoral models’, in Chenery, H. and Srinivasan, T.N. (eds.)Handbook of Development Economics, II, 885–947.
Shoven, J.B. and Whalley, J. (1992),Applying General Equilibrium, Cambridge University Press, Cambridge.
St-Hilaire, F. and Whalley, J. (1983), ‘A microconsistent equilibrium data set for Canada for use in tax policy analysis’Review of Income and Wealth, 29, 175–204.
Taylor, L. (1990), ‘Structuralist CGE models’, in Taylor, L. (ed.)Socially Relevant Policy Analysis, MIT Press, Cambridge.
Whalley, J. (1991), ‘Applied general equilibrium modelling’, in Greenaway, D., Bleaney, M.L. and Steward, I. (eds)Companion to Contemporary Economic Thought, Routledge.
Author information
Authors and Affiliations
Additional information
The financial support of the A.C.E. Project ‘Econometric Inference into the Macroeconomic Dynamics of East European Economies’ is gratefully acknowledged.
Rights and permissions
About this article
Cite this article
Roberts, B.M. Calibration procedure and the robustness of CGE models: Simulations with a model for Poland. Econ Plann 27, 189–210 (1994). https://doi.org/10.1007/BF01265332
Issue Date:
DOI: https://doi.org/10.1007/BF01265332