$TITLE Model M48: Large open economy model: large open economy $ONTEXT Production Sectors Consumer Markets | X1 X2 E1 M2 W CONSH CONSF ---------------------------------------------------------------- P1 | 150 -50 -100 P2 | 50 50 -100 PL | -100 -20 120 PK | -50 -30 80 PW | 200 -200 PFX | 100 -50 -50 PR | -50 50 ---------------------------------------------------------------- $OFFTEXT PARAMETER TM2 Import tariff for good; TM2 = 0; $ONTEXT $MODEL:M48 $SECTORS: X1 ! Production index for good 1 X2 ! Production index good 2 E1 ! Export index of good 1 E2 ! Export index 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 PR ! Rent which generates the export demand function $CONSUMERS: CONSH ! Income level for representative home agent CONSF ! Income level for representative foreign 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 s:1 O:PFX Q:100 I:P1 Q:50 I:PR Q:50 $PROD:M2 O:P2 Q:50 I:PFX Q:50 A:CONSH T:TM2 $PROD:E2 O:PFX Q:(50*0.99) I:P2 Q:50 $PROD:M1 O:P1 Q:50 I:PFX Q:(100*1.01) $PROD:W s:1 O:PW Q:200 I:P1 Q:100 I:P2 Q:100 $DEMAND:CONSH D:PW Q:200 E:PL Q:120 E:PK Q:80 $DEMAND:CONSF D:PFX Q:50 E:PR Q:50 $OFFTEXT $SYSINCLUDE mpsgeset M48 E2.L = 0; M1.L = 0; M48.ITERLIM = 0; $INCLUDE M48.GEN SOLVE M48 USING MCP; M48.ITERLIM = 2000; * Apply a tariff which improves the terms of trade and home * welfare: TM2 = 0.20; $INCLUDE M48.GEN SOLVE M48 USING MCP;