Production system and representation of economic sectors - EPPA: Difference between revisions

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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.
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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{{ModelDocumentationTemplate

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].

Alert-warning.png Note: The documentation of EPPA is 'in preparation' and is not yet 'published'!

Model Documentation - EPPA

Corresponding documentation
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
  1. ↑ 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.
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