FEEM working papers "Note di lavoro"
2017.011
Date: 20/2/2017

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


Authors:
Elisa Delpiazzo (Centro Euro-Mediterraneo sui Cambiamenti Climatici); Ramiro Parrado (Fondazione Eni Enrico Mattei, Centro Euro-Mediterraneo sui Cambiamenti Climatici); Gabriele Standardi (Fondazione Eni Enrico Mattei, Centro Euro-Mediterraneo sui Cambiamenti Climatici)
JEL n.: C68, D58, H60
Keywords: Computable General Equilibrium, Public Sector, Government Budget

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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