Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/336034 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 12332
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
Computational general equilibrium (CGE) models can evaluate detailed tax reforms, trade restrictions, or environmental policy. These models can capture many complexities, but these complexities can make results difficult to interpret. Analytical general equilibrium (AGE) models provide better intuition and interpretation but cannot capture relevant complexities. We propose a method that employs AGE models to understand CGE models – a "model of the model". We apply this idea to climate policy and carbon leakage – the increase in emissions elsewhere. Our AGE models identify seven key economic determinants of leakage within any one outcome. We then unpack results from three existing CGE models.
Subjects: 
analyticala general equilibrium
AGE
and computable general equilibrium (CGE) models
JEL: 
C63
H23
Q58
Document Type: 
Working Paper
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