FEEM working papers "Note di lavoro" series
2017 .011

Extending the Public Sector in the ICES Model with an Explicit Government Institution


Authors: Elisa Delpiazzo, Ramiro Parrado, Gabriele Standardi
Series: Climate Change: Economic Impacts and Adaptation
Editor: Francesco Bosello
Keywords: Computable General Equilibrium, Public Sector, Government Budget
JEL n.: C68, D58, H60

Abstract

This paper aims to present an extension of the ICES model to capture the public sector. Departing from a demand system mainly derived from the GTAP model, ICES-XPS model disentangles the private and the public actors. The paper reviews the changes in both the database and the model equations following the existing literature and considering the availability of data as well. The model is then tested with a series of simple experiments to highlight its contribution to economic analysis in which the public sector may play an important role. Finally, we show the flexibility in the closure rule of the public sector that allows addressing different policy research questions.

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Suggested citation: Delpiazzo, E., R. Parrado, G. Standardi, (2017), 'Extending the Public Sector in the ICES Model with an Explicit Government Institution', Nota di Lavoro 11.2017, Milan, Italy: Fondazione Eni Enrico Mattei

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