Bernard Decaluwé, André Lemelin, Hélène Maisonnave, Véronique Robichaud

The PEP-1-1 model (1 period – 1 country) is the first major output of a project that emerged spontaneously from the long-standing association between the co-authors. They propose a static computable general equilibrium (CGE) model designed for the study of a national economy and intended to be an operational tool for PEP researchers and other users. With it, researchers will be able to develop a relatively standard model, and easily apply it to their country, whatever the particular structure of their social accounting matrix (SAM). Quoting the co-authors:

PEP-1-1 is to be our basis, from which to further deepen our understanding of CGE analysis and develop modeling techniques that will tackle new problems. But, both in sharing our experience and exploring new paths, we want to remain in the realm of operational model building. So our intentions are all at once pedagogical, experimental, and practical.

The present model differs significantly from Decaluwé, Martens and Savard’s EXTER model, which has been used extensively in the past by PEP researchers who had been trained in one of the many modeling “Schools” held over the years in many parts of the world. In many respects, the PEP-1-1 model is richer than the more pedagogical EXTER.

First, the PEP-1-1 model distinguishes several categories of workers and of capital. Also, PEP-1-1 is capable of taking into account a broader set of tax instruments, and it models all possible transfers between institutions (agents). Finally, the GAMS code, presented in a separate document, has been written in a general form, thanks to the use of sets. This will facilitate the application of PEP-1-1 to variously aggregated SAMs, by means of a few simple steps to make the SAM directly readable into the GAMS program.

• A single-country, multi-period, recursive dynamic model PEP-1-t;
• A single-period world model PEP-w-1, and finally
• A multi-period, recursive dynamic world model PEP-w-t.

Readers are invited to send their comments to André Lemelin at the following address: andre_lemelin@ucs.inrs.ca