$TITLE: Model M61-MCP: External Economies of Scale, uses MCP $ONTEXT The model is based on the benchmark social accounts for model M1-1: Production Sectors Consumers Markets | X Y W | CONS ------------------------------------------------------ PX | 100 -100 | PY | 100 -100 | PU | 200 | -200 PW | -40 -60 | 100 PZ | -60 -40 | 100 ------------------------------------------------------ $OFFTEXT PARAMETERS B ENDOWS ENDOWL MODELSTAT SUB; ENDOWS = 100; ENDOWL = 100; B = 0.2; SUB = 0; POSITIVE VARIABLES X Y W PX PY PU PZ PW CONS; EQUATIONS DX Demand for X DY Demand for Y DW Demand for W PRICEX MR = MC in X PRICEY Zero profit condition for Y (PY = MC) PRICEW Zero profit condition for W SKLAB Supply-demand balance for skilled labor UNLAB Supply-demand balance for unskilled labor INCOME National income; PRICEX.. (PW**0.40)*(PZ**0.60)/(X**B) =G= PX*(1+SUB); PRICEY.. (PW**0.60)*(PZ**0.40) =G= PY; PRICEW.. (PX**0.50)*(PY**0.50) =G= PU; DX.. X*100 =E= CONS/(2*PX); DY.. Y*100 =E= CONS/(2*PY); DW.. 200*W =E= CONS/PU; SKLAB.. ENDOWS =E= 0.40*(PW**0.60)*(PZ**(0.40-1))*Y*100 + 0.60*(PW**0.40)*(PZ**(0.60-1))*(X**(1-B))*100; UNLAB.. ENDOWL =E= 0.60*(PW**(0.60-1))*(PZ**0.40)*Y*100 + 0.40*(PW**(0.40-1))*(PZ**0.60)*(X**(1-B))*100; INCOME.. CONS =E= PZ*ENDOWS + PW*ENDOWL - SUB*PX*X*100; MODEL M61 /DX.PX, DY.PY, DW.PU, PRICEX.X, PRICEY.Y, PRICEW.W, SKLAB.PZ, UNLAB.PW, INCOME.CONS/; OPTION MCP=MILES; OPTION LIMROW=0; OPTION LIMCOL=0; $OFFSYMLIST OFFSYMXREF OFFUELLIST OFFUELXREF CONS.L = 200; X.L = 1; Y.L = 1; W.L = 1; PX.L = 1; PY.L = 1; PZ.L = 1; PW.L = 1; PU.L = 1; PY.FX = 1; SOLVE M61 USING MCP; MODELSTAT = M61.MODELSTAT - 1.; * Counterfactual: expand the size of the economy ENDOWS = 200; ENDOWL = 200; SOLVE M61 USING MCP; * Counterfactual: contract the size of the economy ENDOWS = 80; ENDOWL = 80. SOLVE M61 USING MCP;