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This paper uses a computable general equilibrium model Maquette for Millennium Development Goal Simulations (MAMS) calibrated to Mongolia to investigate how the development of major mining projects leads to Dutch disease. The simulations suggest that the process is complex, with the relative strength of the different spending and resource movement channels determined by structural features of the economy, such as factor input needs of the mining sector and substitution elasticities, and how mineral windfalls are eventually spent. In Mongolia, mining sector demand for domestic factor inputs explains two-thirds of the appreciation of the real exchange rate, with demand for labor, aquasi-fixed factor, the most potent channel for transmitting Dutch disease. The simulations also suggest that public policies may only play a limited role in limiting Dutch disease, even if growing fiscal revenues are channeled toward productivity-enhancing public investment rather than public consumption or lower taxes. This finding suggests that policy makers face real trade-offs, namely that, as an equilibrium response, Dutch disease is unavoidable and at odds with an export-led, manufacturing-oriented development strategy unless resources are left in the ground (or mining earnings are saved abroad). If the objective is to limit Dutch disease, then the simulations point to policies that minimize the usage of domestic inputs by the mining sector, or that accommodate the growing demand for key inputs such as labor e.g. through immigration. Regarding spending, policy makers should channel mining revenues toward public investment, to expand the economy's long-run supply potential. Where large direct income flows from the mining sector to households are important, monetary policy may be more useful than fiscal policy in constraining private spending.

CGE --- Computable General Equilibrium --- Dutch Disease --- Mams --- Mdgs --- Millennium Development Goal

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This paper presents results from four simulations of the impact of potential tax reforms in Pakistan on poverty, shared prosperity, and inequality. The simulations are carried out in the context of a dynamic computational general equilibrium model that incorporates endogenous tax evasion. The simulations link the computational general equilibrium model to household survey data that are incorporated in a micro simulation model. The combined models suggest that equal yield increases in sales and corporate tax rates differ mildly in their impacts on consumption and poverty. Endogenously modeled tax evasion plays an important role in the results.

CGE Models --- Computable General Equilibrium Models --- Distributional Effects --- Tax Incidence --- Tax Reform --- Taxation

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Agricultural industries --- Food industry and trade --- Exports --- Demand (Economic theory) --- Foreign trade and employment --- Computable general equilibrium models

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Microeconomics. --- Equilibrium (Economics) --- Economics, Mathematical. --- Consumption (Economics) --- Consumer demand --- Consumer spending --- Consumerism --- Spending, Consumer --- Demand (Economic theory) --- Economics --- Mathematical economics --- Econometrics --- Mathematics --- DGE (Economics) --- Disequilibrium (Economics) --- DSGE (Economics) --- Dynamic stochastic general equilibrium (Economics) --- Economic equilibrium --- General equilibrium (Economics) --- Partial equilibrium (Economics) --- SDGE (Economic theory) --- Statics and dynamics (Social sciences) --- Price theory --- Methodology

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This advanced textbook provides a straightforward but comprehensive introduction to applied general equilibrium modeling. General equilibrium is the backbone of modern economic analysis, which is why generation after generation of economics students have been introduced to it. As an analytical tool, general equilibrium can provide one of the most complete views of a given economy, as it incorporates all economic agents (households, firms, government and the foreign sector) in an integrated way that explicitly reveals the interplay of economic forces—supply and demand—and the balancing role of prices.  Applied general equilibrium goes one step further in modeling, since it entails the integration of microeconomic theory, data handling and computing. This integration is essential for successful empirical modeling, but also involves various abilities that are not found in standard books. This book fills the gap, providing advanced students with the required tools, from the construction of consistent and applicable general equilibrium models to the interpretation of the results that ensue from the adoption of policies. This second edition expands the range of topics covered, including: indispensable general equilibrium theory, step-by-step model design, incremental model extensions, a wealth of sample computer code, procedures for constructing economic databases, database adjustments and database updating algorithms, numerical model calibration, policy strategies and their trade-offs and welfare effects, and a discussion of empirical policy examples.

Economic theory. --- Microeconomics. --- Economics. --- Economic Theory/Quantitative Economics/Mathematical Methods. --- Economic Systems. --- Political Economy/Economic Policy. --- Economic policy. --- Political Economy/Economic Systems. --- Economic Policy. --- Economic theory --- Political economy --- Social sciences --- Economic man --- Price theory --- Economics --- Economic nationalism --- Economic planning --- National planning --- State planning --- Planning --- National security --- Social policy --- Equilibrium (Economics) --- DGE (Economics) --- Disequilibrium (Economics) --- DSGE (Economics) --- Dynamic stochastic general equilibrium (Economics) --- Economic equilibrium --- General equilibrium (Economics) --- Partial equilibrium (Economics) --- SDGE (Economic theory) --- Statics and dynamics (Social sciences)