Computable general equilibrium modeling

Computable general equilibrium (CGE) modeling is a top-down modeling approach that models an economy in a comprehensive way and aims to explain the impact of a particular policy intervention or other relevant shocks on an entire economy. It is one of the most widely used economic models due to its ability to consistently assess the macroeconomic, sectoral, distributive, and environmental impacts of policy interventions. In this entry, the authors describe the concept of the CGE model, which represents the key distinction between CGE models due to their scope and complexities. Finally, it examines the classifications of the main groups of areas applied to the study of a wide and growing range of economic problems for both developed and developing countries.