$TITLE Model M41: Small open economy model. Two goods, two factors. $ONTEXT Production Sectors Consumer Markets | X1 X2 E1 M2 W CONS ----------------------------------------------------------------- P1 | 150 -50 -100 P2 | 50 50 -100 PL | -100 -20 120 PK | -50 -30 80 PW | 200 -200 PFX | 50 -50 ------------------------------------------------------------------ $OFFTEXT PARAMETERS PE2 Export price of good 2, PM1 Import price of good 1, PE1 Export price of good 1, PM2 Import price of good 2, TM2 Import tariff for god 2; PE1 = 1; PM2 = 1; PE2 = 0.99; PM1 = 1.01; TM2 = 0; $ONTEXT $MODEL:M41 $SECTORS: X1 ! Production index for good 1 X2 ! Production index good 2 E1 ! Export level of good 1 E2 ! Export level of good 2 M1 ! Import level of good 1 M2 ! Import level of good 2 W ! Welfare index $COMMODITIES: P1 ! Price index for good 1 P2 ! Price index for good 1 PFX ! Read exchange rate index PW ! Welfare price index PL ! Wage index PK ! Capital rental index $CONSUMERS: CONS ! Income level for representative agent $PROD:X1 s:1 O:P1 Q:150 I:PL Q:100 I:PK Q: 50 $PROD:X2 s:1 O:P2 Q:50 I:PL Q:20 I:PK Q:30 $PROD:E1 O:PFX Q:(50*PE1) I:P1 Q:50 $PROD:M2 O:P2 Q:50 I:PFX Q:(50*PM2) A:CONS T:TM2 $PROD:E2 O:PFX Q:(50*PE2) I:P2 Q:50 $PROD:M1 O:P1 Q:50 I:PFX Q:(50*PM1) $PROD:W s:1 O:PW Q:200 I:P1 Q:100 I:P2 Q:100 $DEMAND:CONS D:PW Q:200 E:PL Q:120 E:PK Q: 80 $OFFTEXT $SYSINCLUDE mpsgeset M41 PW.FX = 1; E2.L = 0; M1.L = 0; E1.L = 1; M2.L = 1; M41.ITERLIM = 0; $INCLUDE M41.GEN SOLVE M41 USING MCP; M41.ITERLIM = 2000; TM2 = 0.05; $INCLUDE M41.GEN SOLVE M41 USING MCP; TM2 = 0.10; $INCLUDE M41.GEN SOLVE M41 USING MCP; TM2 = 0.; PE1 = 1.2; PM1 = 1.21; $INCLUDE M41.GEN SOLVE M41 USING MCP;