Gerege Partners applies modern research techniques for various economic analyses needed by our clients. In particular, we use modeling techniques which help our clients to understand the wider costs and benefits of their decision-making. In this framework, we have developed computable general equilibrium (CGE) models for the Mongolian economy that are used to provide a wide range of strategic advice to our clients in the public and private sectors.
We can:
- Assess how your project impacts on the wider economy through creation of employment, demand for inputs and generation of local and export goods
- Calculate net economic benefits of developments in industries or restructuring plans or infrastructure projects at the national level
- Assess how external shocks impact your business – e.g. price change for world mining commodities, declines in tourism, droughts, or growth in overseas markets
Computable general equilibrium (CGE) models
CGE models have been used since the early 1970s to analyze the economic effects of changes in taxation, trade and environmental policies. CGE modeling is an established method for studying the economy-wide impacts of policies and external shocks. CGE models provide a rich and realistic representation of how changes in one part of an economy flow through or spill over to the remaining parts. CGE modeling is widely recognized as a more robust and rigorous method for economic impact analysis than alternatives such as the common, but simplistic, input-output multiplier analysis. The following figure provides a simplified picture of the links between the major building blocks of the model. The disaggregation of activities, households, factors, and commodities. The arrows represent payment flows. more…
Our CGE models
We have developed the following two CGE models of the Mongolian economy.
ORANI-G
The ORANI applied general equilibrium model of the Australian economy was first developed in the late 1970s as part of the government sponsored IMPACT project. The model has been widely used in Australia as a tool for practical policy analysis by academics, and by economists employed in government departments and in the private sector (Horridge, 2003). The ORANI-G is a comparative-static model which is used to examine short and long-term effects of any policies and external shocks. The model uses the GEMPACK software. We have equipped the ORANI-G model with the Mongolian data. Our version of the model has currently 32 industries, 32 commodities and 9 types of labor. The data is derived from the 2010 Input-Output table constructed by the National Statistical Office of Mongolia. We are currently developing the recursive dynamic version of the ORANI-G model for the Mongolian economy.
PEP-1-1 single-country static CGE model
Partnership for Economic Policy (PEP) is a global organization that specializes in the analysis of policy issues related to poverty, economic and social development in developing countries. They have developed PEP standard CGE models (Robichaud, Lemelin, Maisonnave and Decaluwe, 2013). We have adopted their PEP-1-1 (static, single country) model and developed its Mongolian version. In doing so, we have constructed the Mongolian Social Accounting Matrix (SAM). The main source of information for the construction of the SAM is the 2010 Input Output table, Household Socioeconomic Survey, Labor Force Survey and other relevant information compiled by the National Statistical Office. The Mongolian SAM is a 80×80 square matrix
