Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267500 
Year of Publication: 
2022
Series/Report no.: 
Working Paper No. 035.2022
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
The Water, Energy, Food and Ecosystems (WEFE) nexus refers to the system of complex and highly non-linear interconnections between these four elements. It now represents the basic framework to assess and design policies characterized by an holistic environmental end economical perspective. In this work, we provide a systematic review of the macroeconomic models investigating its components as well as combinations of them and their interlinkages with the economic system. We focus on four different types of macroeconomic models: Computable General Equilibrium (CGE) models, Integrated Assessment Models (IAMs), Agent-based Models (ABMs), and Dynamic Stochastic General Equilibrium (DSGE) models. On the basis of our review, we find that the structure of IAMs is currently the most used to represent the nexus complexity, while DSGE models focus only on single components but appear to be better suited to account for the randomization of exogenous shocks. CGE models and ABMs could be more effective on the side of the policy perspective. Indeed, the former can account for interlinkages across sectors and countries, while the latter can define theoretical frameworks that better approximate reality.
Subjects: 
Agent-based
Computable general equilibrium
Dynamic stochastic general equilibrium
Integrated assessment
Macroeconomic models
Water-energy-food ecosystems nexus
JEL: 
Q18
Q25
Q43
Q54
Q57
Document Type: 
Working Paper

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