Technological Advancements and Globalized Supply Chains

Technological advancements, combined with country-specific specialization in the production of food and non-food commodities, have accelerated the integration of developing countries into global markets. This has globalized commodity and factor supply chains, meaning that shocks in one country increasingly impact the production and consumption patterns of others.

For example, the post-COVID-19 effects and the Ukraine-Russia conflict have disrupted global supply chains, particularly for industrial intermediate inputs in the Global South. These shocks have led to economic disruptions, including:

• Reduced tax collections
• Increased imported inflation
• Exchange rate depreciation pressures
• Higher expenditure demands

These factors contribute to increased fiscal deficits and debt accumulation.

Need for Economy-Wide Modeling

Such shocks have challenged traditional policy analysis methods. There is a growing need for complementary economy-wide tools that capture the backward and forward linkages between productive sectors and their subsequent links to labor markets, commodity markets, and institutions like governments and enterprises.

The Computable General Equilibrium (CGE) model is well-suited for this purpose.

MEFMI CGE Modeling Course

Against this backdrop, MEFMI will conduct a course on “Introduction to CGE Modeling using General Algebraic Modeling System (GAMS).” This course will introduce participants to building and using a static CGE model for policy analysis.

Objectives

1. To create an understanding of the role of economy-wide modeling in policy analysis and guidance, especially amidst global economic and geopolitical shocks.
2. To develop participants’ capacity in understanding and using Social Accounting Matrices (SAM).
3. To develop participants’ capacity in building and using CGE models in policy analysis.

Course Content

1. Introduction to economy-wide modeling and databases
2. Economic modeling in GAMS software
3. Step-by-step building of a CGE model in GAMS
4. Modeling open and closed economies in CGE models
5. Debugging CGE models
6. Policy analysis using CGE models (interpretation of results and writing policy papers)

Target Group

This course targets junior-to-mid-level officials from:

• Ministries of Finance/Economic Planning responsible for economic modeling and policy analysis.
• Central Banks.
• Statistics offices dealing with issues related to policy analysis.