Capital and labour markets - COFFEE-TEA: Difference between revisions
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{{ModelDocumentationTemplate | The macroeconomic closure assumes full employment of the factors of production (capital and labour). Savings equals investment in the general equilibrium, but regionally the imbalances are closed by a surplus (or deficit) in the current account. An endogenous real exchange rate clears the current accounts and the capital account decreases exougenously in the long-run. Capital stock evolves at each period with the formation of new capital that depends on the investment level in that period and the capital depreciation rate, as described in Equation 2 | ||
<math>K{_{r,t}} = I{_{r,t}} + (1 - \delta{_r}) K{_{r,t-1}}</math> | |||
where: | |||
<nowiki>$K{_{r,t}}$ is the capital stock in region $r$ and time $t$;</nowiki> | |||
<nowiki>$I{_{r,t}}$ is the investment in new capital goods in region $r$ and time $t$; and</nowiki> | |||
$\delta{_r}$ is the depreciation rate of capital in region $r$.{{ModelDocumentationTemplate | |||
|IsEmpty=No | |IsEmpty=No | ||
|IsDocumentationOf=TEA | |IsDocumentationOf=TEA | ||
|DocumentationCategory=Capital and labour markets | |DocumentationCategory=Capital and labour markets | ||
}} | }} | ||
Revision as of 02:24, 14 December 2018
The macroeconomic closure assumes full employment of the factors of production (capital and labour). Savings equals investment in the general equilibrium, but regionally the imbalances are closed by a surplus (or deficit) in the current account. An endogenous real exchange rate clears the current accounts and the capital account decreases exougenously in the long-run. Capital stock evolves at each period with the formation of new capital that depends on the investment level in that period and the capital depreciation rate, as described in Equation 2
where:
$K{_{r,t}}$ is the capital stock in region $r$ and time $t$;
$I{_{r,t}}$ is the investment in new capital goods in region $r$ and time $t$; and
$\delta{_r}$ is the depreciation rate of capital in region $r$.
Note: The documentation of COFFEE-TEA is 'under review' and is not yet 'published'!| Corresponding documentation | |
|---|---|
| Previous versions | |
| Model information | |
| Model link | |
| 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. |
| Anticipation | |