applied general equilibrium strongmodelingstrong with mpsge as a gams.pdf

Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax∗ Thomas F. Rutherford Department of Economics University of Colorado rutherford@ Revised March, 1997 ABSTRACT This paper describes a programming environment for economic equilibrium analysis. The system introduces the Mathematical Programming System for General Equilibrium analysis (MPSGE, Rutherford 1987) within the Generalized Algebraic Modelling System (GAMS, Brooke, Kendrick and Meeraus (1988)). This arrangement exploits GAMS’ set- oriented algebraic syntax for data manipulation and report writing. The system based on the tabular MPSGE input format provides a compact, non-algebraic representation of a model’s nonlinear equations. This paper provides an overview of the modelling environment and three worked examples in tax policy analysis. KEYWORD: Applied General Equilibrium. JEL CLASSIFICATION: C68 ∗Over the years this project has received intellectual support and encouragement from a number of individuals, including Alan Manne, Lars Mathiesen, Alex Meeraus, Glenn Harrison and David Tarr. In addition helpful suggestions from an anonymous referee are gratefully acknowledged. The author remains fully responsible for the views presented here and for any remaining errors. 1 INTRODUCTION This paper introduces a programming language for economic equilibrium modelling. The paper presents the motivation for the system, the programming syntax, and three small scale examples.