Price volatility, behavioral response, GTAP-E model, petroleum products market, productivity, CGE Computable general equilibrium, data, Energy-Oriented CGE Models
The CGE approach constitutes an open framework for linkages to models from other disciplines, thereby accommodating the integrated assessment of sustainability issues.
[...] Validating Energy-Oriented CGE Models - Jayson Beckman, Thomas Hertel and Wallace Tyner (2011) Book analysis Presentation ● Answers to criticism on CGE models by assessing econometrics validity. ○ Validation of is crucial: CGE are one of the few models capable of modeling the economies of countries for which time series data are not relevant. Researchers need a model capable of replacing historical evidence. ● The authors test the GTAP-E model, a CGE model, by taking oil as key parameter and checking the performance of the model against historical outcomes. [...]
[...] ○ GTAP is the most popular GCE model and the GTAP-E is the EnergyEnvironmental Version of the GTAP ● Inside the GTAP-E data base : ○ tables of transaction values The methodology 1st phase : Price Volatility For the period 2001- 2006, can the GTAP-E model replicate historical price volatility, given five year stochastic shocks to supply and demand in the world oil market? ● The original model cannot ● After revision, the updated model can predict regional petroleum price distributions 2nd phase : Behavioral response Can the GTAP-E model to replicate fundamental changes in the global petroleum products market over the 2001-2006 period ? ● 2001 - 2006 : 154% global increase in oil price with a 10% increase in demand ● Only the revised model can predict the change. [...]
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