Conrad: Computable General Equilibrium Models for Environmental Econnomics and Policy Analysis

Conrad, Klaus. 1999. “Computable General Equilibrium Models for Environmental Economics and Policy Analysis.” Pp. 1060-1088 in Handbook of environmental and resource economics.


“A CGE model is a system of linear and non-linear equations that is solved to simulate market equilibrium. It includes equations describing consumer and producer supply an demand behavior that are derived explicitly from conditions for profit or utility maximization, and market-clearing conditions in product and input markets. Unlike inter-industry input-output models and other earlier economy-wide planning models, household factor income and expenditures are linked in a theoretically appropriate manner” (1062).