Introduction to Computable General Equilibrium (CGE) Modelling Workshop

12 Mar 2008 - 02:00
20 Mar 2008 - 02:00
TIPS / The ComMark Trust Office, 826 Government Avenue, Pretoria

The IT revolution has allowed techniques that were once the preserve of a handful of leading theoreticians to become part of the practical economist's everyday toolkit. CGE modelling is one of a number of approaches to economy-wide analysis that have become accessible and practicable as data- and computer-based techniques have developed. An increasing number of economists use this framework to analyse real-world issues that were previously approached through less appropriate partial equilibrium methods.

As part of our commitment to ensure that Southern Africa benefits from these development, TIPS has co-presented a series of related short workshops over the past five years and is planning a further installment from 12 to 20 March 2008. This workshop is part of an ongoing programme on Economic Modelling at TIPS and integrates theory, real world data, hands-on computer work and real-world applications. Participants will be:

  • introduced to the micro, macro and trade theories that underlie typical CGE models;
  • offered an overview and practical examples of Social Accounting Matrices (SAMs) and of parameter and elasticity estimation methods which typically provide the data on which CGEs are built;
  • taught the necessary commands in GAMS, a programming language widely used in economy-wide policy modelling; and
  • exposed to issues involved in using models for specific applications, such as the analysis of trade, public finance, regulation and environmental economics. Some of these topics will be presented by special instructors, who bring a wide range of practical experiences to the learning process.

These components of the modeller's tool-kit are taught in an integrated and cumulative way. The theory is developed alongside the practical applications, which move from introductory exercises to more advanced applications. The applications use materials developed by the International Food Policy Research Institute (IFPRI) and adapted by the workshop instructors to suit Southern African economies.

Participants will apply what they learn to a mini-project, which will be presented to the class at the end of the workshop. By that time, all participants will have sufficient competence to be able to continue developing their skills independently.

The workshop is targeted at those who wish to develop professional expertise in the area, as well as those who need to understand the potential and limitations of the use of these approaches without themselves becoming modellers. As such it should appeal to policy-makers and analysts in both the public and the private sectors, as well as to students and academics. Many of the special instructors are alumni of past workshops. The workshop is part of the development of a community of builders and users of economy-wide models in Southern Africa.

No previous exposure to CGE modelling is required, although it will be an advantage if participants have some familiarity with SAMs. Those without SAM experience will be given an opportunity to attend a brief introduction the day at the start of the programme.

Workshop fees:

R12 500 (excluding VAT, including lunch and refreshments, R15 000 for participants outside of SADC).


To ensure that the workshop is pitched at the correct level, we invite interested participants to submit short CVs to before 12 January 2008.


Upon acceptance, participants will be required to make a non-returnable deposit of R2 500 (R3 000 for participants outside of SADC) to secure a place before 26 January 2008.


Full workshop payment by 26 January 2008 will ensure to a 20% discount on the workshop fees.

Tentative Programme:

The workshop will be taught using a mixture of lectures and hands-on computer labs. Because the emphasis is on developing an understanding of CGE modelling as a practical tool, many sessions will involve both lectures and exercises. We also try to pace the workshop to ensure maximum understanding. The following programme is thus indicative of the sequence of topics rather than the exact times devoted to each area. Lab sessions include discussion and interpretation of results, to which participants will be expected to contribute. Light "homework sheets" will be distributed at the end of each day, as preparation for the next day's topics.





Wednesday 12 March, Day 1: Start 9h00

  • Introduction: Quantitative Policy Modelling and SAM construction and multiplier introduction
  • Understanding Social Accounting Matrices (SAMs)


  • Introducing GAMS & partial equilibrium of consumer and producer behaviour
  • First GAMS programming: partial equilibrium consumer and producer behaviour

Thursday, 13 March, Day 2:

  • A simple Walrasian general equilibrium model
  • Exercise 1: A simple autarkic CGE model

Friday, 14 March, Day 3

  • Approaches to modelling production with intermediate goods
  • Exercise 2: Autarkic model with intermediate production flows


  • Simple Closure Rules
  • Exercise 3a: Autarkic model with savings and investment

Saturday, 15 March, Day 4 (morning only)

  • Factor market closures
  • Exercise 3b: Sector specific wages

Sunday, 16 March



Monday,17 March, Day 5

  • Introducing the public sector
  • Exercise 4: Autarkic model with government and alternative factor market closures

Tuesday, 18 March, Day 6

  • Introducing trade and the external account
  • Exercise 5: A full open economy model


  • The Standard IFPRI CGE model
  • Using the Standard IFPRI model

Wednesday, 19 March, Day 7


  • Using the Standard IFPRI model



  • Project preparation

Thursday, 20 March, Day 9: until Lunch


  • Project presentations



  • Wrap up: where to now?