Trade - COFFEE-TEA
|Institution||COPPE/UFRJ (Cenergia), Brazil, http://www.cenergialab.coppe.ufrj.br/.|
|Solution concept||General equilibrium (closed economy)|
|Solution method||The COFFEE model is solved through Linear Programming (LP). The TEA model is formulated as a mixed complementary problem (MCP) and is solved through Mathematical Programming System for General Equilibrium -- MPSGE within GAMS using the PATH solver.|
In the TEA model, international trade follows an Armington's aggregation1, in which a composite CES function differentiate consumer's preferences between imported and domestic goods.
In the COFFEE model, international trade of energy and agriculture commodities is explicitely represented. Partial equilibrium is reached in a minimun cost basis, whereas trade between regions is part of the solution.
- Paul S Armington (1969). A theory of demand for products distinguished by place of production. Staff Papers, 16 (1), 159-178. | |