Macro-economy - GRACE

Figure 1. Flow of payments in the GRACE model. Source: Aaheim and Rive (2005).

Figure 2. The Regional Household and the Global Bank. Source: based on Hertel (1997).

Figures 1 and 2 illustrate the circular flow of payments among the main components of the model, which explicitly depicts interactions between commodity and factor markets as well as interactions among regions. The Regional Household, which represents private households and government in each region, receives the payments from supplying primary factors. The income of the Regional Household is spent on private and public consumption, and savings.

The Global Bank collects savings from all regions and then provides investments to regions so that the expected return to capital equalises among regions. The Global Trust collects the earnings from installed capital and distributes them among regions, given the assumption of perfect capital mobility. Firms use primary factors and intermediates to produce goods and services. Domestic and imported commodities build the so-called Armington aggregate, which is then distributed among private and public consumption and investments.

Note: The documentation of GRACE is 'under review' and is not yet 'published'!

Model Documentation - GRACE
Model scope and methods - GRACE Model concept, solver and details - GRACE Temporal dimension - GRACE Spatial dimension - GRACE Policy - GRACE Socio-economic drivers - GRACE Population - GRACE Economic activity - GRACE Macro-economy - GRACE Production system and representation of economic sectors - GRACE Capital and labour markets - GRACE Monetary instruments - GRACE Trade - GRACE Technological change - GRACE Energy - GRACE Energy resource endowments - GRACE Fossil energy resources - GRACE Uranium and other fissile resources - GRACE Bioenergy - GRACE Non-biomass renewables - GRACE Energy conversion - GRACE Electricity - GRACE Heat - GRACE Gaseous fuels - GRACE Liquid fuels - GRACE Solid fuels - GRACE Grid, pipelines and other infrastructure - GRACE Energy end-use - GRACE Transport - GRACE Residential and commercial sectors - GRACE Industrial sector - GRACE Other end-use - GRACE Energy demand - GRACE Technological change in energy - GRACE Land-use - GRACE Agriculture - GRACE Forestry - GRACE Land-use change - GRACE Bioenergy land-use - GRACE Other land-use - GRACE Agricultural demand - GRACE Technological change in land-use - GRACE Emissions - GRACE GHGs - GRACE Pollutants and non-GHG forcing agents - GRACE Carbon dioxide removal (CDR) options - GRACE Climate - GRACE Modelling of climate indicators - GRACE Climate damages, temperature changes - GRACE Non-climate sustainability dimension - GRACE Air pollution and health - GRACE Water - GRACE Other materials - GRACE Other sustainability dimensions - GRACE Appendices - GRACE Mathematical model description - GRACE Data - GRACE References - GRACE
Corresponding documentation
AIM-Hub BLUES C3IAM COFFEE-TEA DNE21+ GCAM GEM-E3 GRACE IFs IMACLIM IMAGE MESSAGE-GLOBIOM POLES REMIND-MAgPIE TIAM-UCL WITCH
Previous versions
No previous version available
Model information
Model link	https://sites.google.com/view/taoyuanwei/home/grace
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
Anticipation