Capital and labour markets - GRACE
Economic growth is driven by investments, population growth, technological change and the availability of natural resources. Labour force growth is exogenously determined in the model and calibrated based on some population projection (e.g., World Bank). In the reference scenario, the real Gross Domestic Product (GDP) is exogenous and calibrated based on some economic growth projection (e.g., World Bank or OECD) by making labour productivity endogenous, i.e., a labour-augmenting technical change. Alternatively, the economic growth in the reference scenario could be calibrated by making total factor productivity endogenous (i.e., labour and capital). In policy simulations, factor endowment is scaled by the calibrated parameters of factor productivity and real GDP is endogenously determined within the model. Following the MIT EPPA6 model , we assume an annual autonomous energy efficiency improvement of 1.0% for non-electric sectors and 0.3% for the electric sector.
|No previous version available|
|Institution||Center for International Climate Research (CICERO), Norway, https://cicero.oslo.no/en.|
|Solution concept||General equilibrium (closed economy)|
|Solution method||SimulationRecursive dynamic solution method|