Critical Review Of Literature On Computable General Equilibrium Models

The Paper Reviews Recent Empirical Work, Which Uses Computable General Equilibrium (Cge) Framework For Policy Analysis. Various Models Have Been Built And Applied To Address A Variety Of Policy Issues. Each Model Has Its Own Advantages As Well As Limitations. During The Last Two Decades, There Is A Proliferation Of General Equilibrium Models Developed For Developing As Well As Developed Countries. Cge Models Are Basically The Modern Version Of Walras’ Model Of The Competitive Economy. The First Serious Attempt To Use A Large Cge Model To Study A Real Economy Appears To Be Johansen (1960). For Several Years Following, Cge Models Did Not Receive Much Attention. Then, Shoven And Whalley (1972), Whalley (1975, 1977), Shoven (1976), And Miller And Spencer (1977), Were Among The Earliest Policy-Oriented Computable General Equilibrium Studies. Subsequently, The Number Of Cge Models Of National Economies Exploded. Naqvi (1998) Mentioned Four Main Branches Of Cge Models. First, Johansen’S Multisectoral Growth Model. This Model Focuses On Sectoral Allocation Of Capital And Labour And Distribution Of Sectoral Output. Second, Harberger-Scarf-Shoven-Whalley Models, Which Have Their Roots In Welfare Economics. Third, Jorgenson Approach To Modeling Relates To Econometric Estimation. Finally, Ginsburgh And Walbroek Approach To Modeling Relates To Linear Programming Framework.