Specification and Simulation of General Equilibrium Models

Module: Specification and Simulation of General Equilibrium Models (6 Credits)
Name in diploma supplement	Specification and Simulation of General Equilibrium Models
Responsible	Prof. Dr. Volker Clausen
Admission criteria	See exam regulations.
Workload	180 hours of student workload, in detail: Attendance: 45 hours Preparation, follow up: 90 hours Exam preparation: 45 hours
Duration	The module takes 1 semester(s).
Qualification Targets	Students have a deepened understanding of computable general equilibrium models master the basics of implementation of the general equilibrium models are able to adopt this methodology in their independent quantitative analyses can describe and interpret the results from general equilibrium models linking them to relevant theory learn the programming language GAMS, the model language MCP and the meta-language MPSGE understand simple basic models and their extensions are able to implement the basic models independently both in MCP and MPSGE can modify the given models in order to capture other situations can interpret the results and link them to the relevant economic theory
Relevance	The content of the course is useful in many scientific institutions, business consultancy, multinational firms, international organizations, economic research institutes and ministries. The theory-driven step-by-step specification of the models is a prerequisite for understanding economic research in this field and thus a basis for conducting independent research.
Module Exam	The module-related examination is performed by a written test (usually 60-90 minutes).
Usage in different degree programs	BWL EaF Master > Wahlpflichtbereich > 1.-3. Sem, Elective Mathe Master > Anwendungsfach "Wirtschaftswissenschaften" > Schwerpunkt "VWL-M II" > 1.4. Sem, Elective Mathe Master > Anwendungsfach "Wirtschaftswissenschaften" > Schwerpunkt "VWL-M I" > 1.4. Sem, Elective VWL Master > Wahlpflichtbereich I > 1.-3. Sem, Elective WiMathe Master > VWL-M I > 1.-4. Sem, Elective WiMathe Master > VWL-M II > 1.-4. Sem, Elective
Elements	Lecture General Equilibrium Models of Open Economies (3 Credits) Exercise General Equilibrium Models of Open Economies (3 Credits)
Module: Specification and Simulation of General Equilibrium Models (WIWI‑M0661)

Lecture: General Equilibrium Models of Open Economies (3 Credits)
Name in diploma supplement	General Equilibrium Models of Open Economies
Organisational Unit	Lehrstuhl für VWL, insb. Internationale Wirtschaftsbeziehungen
Lecturers	Prof. Dr. Volker Clausen
Hours per week	2	Language	English
Cycle	every second winter semester	Participants at most	16
Preliminary knowledge Advanced knowledge in the field of international trade
Abstract The course provides deep knowledge of design and implementation of Computable General Equilibrium (CGE) models.
Qualification Targets Students have a deepened understanding of computable general equilibrium models master the basics of implementation of the general equilibrium models are able to adopt this methodology in their independent quantitative analyses can describe and interpret the results from general equilibrium models linking them to relevant theory
Contents Introduction to computable general equilibrium analysis Comparative static analysis of a closed economy with two goods and two production factors Extensions of the basicmodel for a closed economy with heterogeneous labor, heterogeneous households and endogenous labor supply Models of open economies: extension of the basic model for an open economy with import tariffs and quotas and other trade policies General equilibrium models with imperfect competition on the goods markets
Literature Francois/Reinert, Applied Methods for Trade Policy Analysis; Jones, The Structure of Simple General Equilibrium Models; Shoven/Whalley, Applying General Equilibrium; Articles from economics literature
Teaching concept The class is held in the form of lectures. The construction and implementation of the abovementioned models is illustrated by using a special software (GAMS, „General Algebraic Modeling System“) as well as a special programming language for general equilibrium models (MPSGE, „Mathematical Programming System for General Equilibrium“).
Lecture: General Equilibrium Models of Open Economies (WIWI‑C0806)

Exercise: General Equilibrium Models of Open Economies (3 Credits)
Name in diploma supplement	General Equilibrium Models of Open Economies
Organisational Unit	Lehrstuhl für VWL, insb. Internationale Wirtschaftsbeziehungen
Lecturers	Prof. Dr. Volker Clausen
Hours per week	2	Language	English
Cycle	every second winter semester	Participants at most	16
Abstract This tutorial provides students with programming experience while constructing and implementing the computable general equilibrium models.
Qualification Targets Students learn the programming language GAMS, the model language MCP and the meta-language MPSGE understand simple basic models and their extensions are able to implement the basic models independently both in MCP and MPSGE can modify the given models in order to capture other situations can interpret the results and link them to the relevant economic theory
Contents Introduction to computable general equilibrium analysis Comparative static analysis of closed economy with two goods and two production factors Extensions of the basic model for closed economy with heterogeneous labor, heterogeneous households and endogenous labor supply Models of open economies: extension of the basic model for open economy with import tariffs and quotas as well as with international mobile capital General equilibrium models with imperfect competition on the goods markets
Literature Markusen, J. R., The Markusen Examples, www.mpsge.org
Exercise: General Equilibrium Models of Open Economies (WIWI‑C0807)