This paper describes how factor markets are presented in applied equilibrium models and
how we plan to improve and to extend the presentation of factor markets in two specific
models: MAGNET and ESIM. We do not argue that partial equilibrium models should
become more ‘general’ in the sense of integrating all factor markets, but that the shift of
agricultural income policies to decoupled payments linked to land in the EU necessitates the
inclusion of land markets in policy-relevant modelling tools. To this end, this paper outlines
options to integrate land markets in partial equilibrium models.
A special feature of general equilibrium models is the inclusion of fully integrated factor
markets in the system of equations to describe the functionality of a single country or a group
of countries. Thus, this paper focuses on the implementation and improved representation of
agricultural factor markets (land, labour and capital) in computable general equilibrium
(CGE) models. This paper outlines the presentation of factor markets with an overview of
currently applied CGE models and describes selected options to improve and extend the
current factor market modelling in the MAGNET model, which also uses the results and
empirical findings of our partners in this FP project.
Original language | English |
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Place of Publication | Brussel |
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Publisher | CEPS |
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Number of pages | 26 |
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ISBN (Print) | 9789461381941 |
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Publication status | Published - 2012 |
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Name | Factor Markets Working Papers |
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Publisher | CEPS |
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No. | 23 |
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