Production system and representation of economic sectors - EPPA: Difference between revisions
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Note: The documentation of EPPA is 'in preparation' and is not yet 'published'!
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The basic production setting of EPPA is based on the Constant Elasticity of Substitution (CES) function. To account for the empirical observation that income elasticities for the demand of commodities such as food tend to decrease when an economy grows, the Stone-Geary adjustment is applied by recalibrating the subsistence consumption over time to approximate the empirical income elasticity evidence<ref>Chen, Y.-H. H., S. Paltsev, J. Reilly, J. Morris and M. Babiker (2016). Long-term economic modeling for climate change assessment. Economic Modeling, 52, 867–883.</ref>. | |||
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Latest revision as of 18:34, 3 August 2022
The basic production setting of EPPA is based on the Constant Elasticity of Substitution (CES) function. To account for the empirical observation that income elasticities for the demand of commodities such as food tend to decrease when an economy grows, the Stone-Geary adjustment is applied by recalibrating the subsistence consumption over time to approximate the empirical income elasticity evidence[1].
Note: The documentation of EPPA is 'in preparation' and is not yet 'published'!| Corresponding documentation | |
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| Previous versions | |
| No previous version available | |
| Model information | |
| Model link | |
| Institution | Massachusetts Institute of Technology (MIT), USA, https://globalchange.mit.edu/. |
| Solution concept | General equilibrium (closed economy) |
| Solution method | Optimization |
| Anticipation | |
- ↑ Chen, Y.-H. H., S. Paltsev, J. Reilly, J. Morris and M. Babiker (2016). Long-term economic modeling for climate change assessment. Economic Modeling, 52, 867–883.