Input-Output Model and
Computable General Equilibrium Model
Saipin Cintakulchai
16 Jan 2008
I-O Model and CGE Model
1
แบบจำลองปัจจัยกำรผลิตและผลผลิต
Input-Output Model
1. แนวคิดและประโยชน์ ของแบบจำลอง
ปัจจัยกำรผลิตและผลผลิต
2. ข้ อจำกัดของแบบจำลองปัจจัยกำรผลิตและ
ผลผลิต
16 Jan 2008
I-O Model and CGE Model
2
Data
Theoretical
Structure
Solution
Techniques
The Models
Vehicles for
Practical Policy Analysis
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I-O Model and CGE Model
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กำรสร้ ำงแบบจำลอง
เลือกตัวแปร
เขียนให้ อยู่ในรู ปสมกำร
หำคำตอบ
อธิบายความหมายของคาตอบที่ได้
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I-O Model and CGE Model
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Simple Input-Output Model
คำถำม: แต่ ละอุตสำหกรรมควรผลิตสิ นค้ ำจำนวนเท่ ำใด
จึงเพียงพอกับควำมต้ องกำรรวมในระบบเศรษฐกิจ
Labor
Households
Industries
Inputs
Outputs
:- shoes
:- machine,
leather,
rubber,
etc.
Final goods
:- shoes
Product markets
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I-O Model and CGE Model
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Input - Output Model
วัตถุประสงค์ : วำงแผนด้ ำนกำรผลิต
ข้ อสมมุติ
1. ผู้ผลิตแต่ ละรำยผลิตสิ นค้ ำชนิดเดียว
2. สั ดส่ วนกำรใช้ ปัจจัยกำรผลิตมีค่ำคงที่
3. มีเทคโนโลยีกำรผลิตแบบ Constant returns to scale
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I-O Model and CGE Model
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Simple Input - Output Table
Unit: Baht
Goods
Industries
Final Demand
Total value
of output
1
2
1
X11
X12
X1H
X1
2
X21
X22
X2H
X2
Labor
L1
L2
Equilibrium : X1 = C1
Cost
C1
C2
and X2 = C2
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I-O Model and CGE Model
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Input - Output Model
X1 = X11 + X12 + X1H
X2 = X21 + X22 + X2H
กำหนดให้
ดังนั้น
--- (1)
--- (2)
aij = Xij / Cj ; i, j = 1, 2
Xij = aij Xj
Xj
X1 = a11 X1 + a12 X2 + X1H
--- (1-a)
X2 = a21 X1 + a22 X2 + X2H
--- (2-a)
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I-O Model and CGE Model
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จัดรู ปสมกำรใหม่ จะได้
(1 - a11 ) X1 - a12 X2 = X1H
---(1-b)
- a21 X1 + (1 - a22 ) X2 = X2H
---(2-b)
หรื อในรู ปของ matrix : (I - A) X = D
A=
a11 a12
a21 a22
คำตอบ
16 Jan 2008
X=
X1
X2
: X = (I - A)
D=
-1
X1H
X2H
D
I-O Model and CGE Model
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Input-Output Table
(Closed Economy)
Goods
Industries
Unit: Baht
Final Demand Total Outputs
1 ... n
1
2
.
.
n
X11 …..X1n
X21 …..X2n
.
.
.
.
Xn1 …..Xnn
primary
inputs
L1 …..Ln
Costs
C1 …..Cn
16 Jan 2008
X1H
X2H
.
.
XnH
X1G
X2G
.
.
XnG
X1
X2
.
.
Xn
Equilibrium : Xi = Ci
I-O Model and CGE Model
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เขียนในรูป matrix ได้ ว่ำ : (I - A) X = D
เมื่อ
aij = Xij / Xj ; i, j = 1, 2, … , n
a11 a12 … a1n
A=
a21 a22 … a2n
an1 an2 … ann
คำตอบ :
16 Jan 2008
X=
X1
X2
.
.
.
Xn
X1H+X1G
X2H+X2G
. .
D=
. .
. .
XnH+XnG
X = (I - A) -1 D
I-O Model and CGE Model
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Input-Output Table
(Open Economy)
Unit: Baht
Goods
Industries
D
o
m
e
s
t
i
c
HH
X1H
X2H
..
XnH
G
X1G
X2G
..
XnG
EX
1
2
..
n
1 ... n
X11 …..X1n
X21 …..X2n
..
..
Xn1 …..Xnn
X1E
X2E
..
XnE
X1
X2
..
Xn
I
m
p
o
r
t
s
1
2
..
n
M11 …..M1n
M21 …..M2n
..
..
Mn1 …..Mnn
M1H
M2H
..
MnH
M1G
M2G
..
MnG
0
0
..
0
M1
M2
..
Mn
primary
inputs
L1 …..Ln
Costs
C1 …..Cn
16 Jan 2008
Final Demand Total Outputs
Equilibrium : Xi = Ci
I-O Model and CGE Model
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กำรประยุกต์ ใช้
แบบจำลองปัจจัยกำรผลิตและผลผลิต
จำก
: X = (I - A)
-1
D
1. Production Planning
2. Output Multiplier
3. Linkage Effect
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I-O Model and CGE Model
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ข้ อจำกัดของ Input - Output Model
 I-O model ถือว่ ำมีทรัพยำกรอยู่ไม่ จำกัด
 I-O model กำหนดให้ final demand เป็ น
ตัวแปรภำยนอกซึ่งในบำงกรณีอำจไม่ ถูกต้ อง
 I-O model ไม่ มกี ำรอธิบำยควำมเชื่ อมโยง
ระหว่ ำงรำยรับและรำยจ่ ำยของภำคครัวเรื อน
ไม่ ได้ แยกวิเครำะห์ ผลกระทบด้ ำนรำคำและ
ปริมำณออกจำกกัน
16 Jan 2008
I-O Model and CGE Model
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Computable General Equilibrium Model
or CGE Model
Overview
Objective and Advantages of a CGE
model
How many types of CGE model are
there?
Structure of a CGE model
Database for a CGE model
Limitations of a CGE model
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I-O Model and CGE Model
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Major objectives
of a CGE model
Economic Planning
 Policy Analysis

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I-O Model and CGE Model
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Advantages of a CGE model
 multisector
planning model
 resource allocation analysis
 income distribution analysis
 etc.
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I-O Model and CGE Model
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A CGE Model
incorporates market mechanisms
presents variables in terms of price
and quantity
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I-O Model and CGE Model
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How many types of CGE model
are there?
Static Model
 Dynamic Model

Single - Country Model
 Multiple - Country Model

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I-O Model and CGE Model
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Structure of a CGE model




Production
Consumption
Income
Equilibrium conditions
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I-O Model and CGE Model
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Flows of goods in a simple CGE model
labour
capital
exports
industries
inputs
Foreign market
outputs
Domestic market
imports
households
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government
I-O Model and CGE Model
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Example : a simple CGE model

closed economy

two sectors with perfect competition

two goods (X1, X2) and two factors
(K, L)

one household
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I-O Model and CGE Model
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Structure of a CGE model



Production
Consumption
Income
Equilibrium
 Market clearing conditions
 Zero-profit conditions
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I-O Model and CGE Model
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Production structure
Domestic products
Exports
Industries
Intermediate inputs
Good 1
Domestic
products
16 Jan 2008
Good 2
Primary inputs
labour
capital
Imports
I-O Model and CGE Model
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Production Block
Problem :
Minimize costs of production
Min Ci = P1X1i + P2X2i + WLi + RKi
subject to production function
Xi = Xi ( X1i, X2i, Li, Ki )
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I-O Model and CGE Model
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Solution : Demand for inputs
X1i = f1i ( P1, P2, W, R, Xi)
 X2i = f2i ( P1, P2, W, R, Xi)
 Li = fLi ( P1, P2, W, R, Xi)
 Ki = fKi ( P1, P2, W, R, Xi)

8 equations and 14 variables
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I-O Model and CGE Model
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Household Demand and Its Income
Labour
Income
Capital
Income
Total Income
Consumption
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Good 1
Good 2
Domestic
products
Imports
I-O Model and CGE Model
Savings
Income Taxes
27
Consumption Block
Problem :
Maximize Utility
Max U = U ( X1H, X2H )
subject to budget constraint
M = P1X1H + P2X2H
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I-O Model and CGE Model
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Solution : Demand for goods
X1H = f1H ( P1, P2, M )
 X2H = f2H ( P1, P2, M )

where
M=WL+RK
3 equations and 5 variables (new)
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I-O Model and CGE Model
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Profit Functions
Zero - Profit Assumption
TRi = TCi
or PiXi = P1X1i + P2X2i + WLi + RKi
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I-O Model and CGE Model
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Solution : Price relationship
Pi = P1( X1i / Xi ) + P2( X2i / Xi )
+ w ( Li / Xi ) + r( Ki / Xi )
or Pi = a1i P1 + a2i P2 + aLi W + aKi R
2 equations
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I-O Model and CGE Model
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Market Clearing: Equilibrium
Product markets :
X i= X i1 + X i2 + X iH
Factor markets :
L= L 1 + L 2
K= K 1 + K 2
4 equations
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I-O Model and CGE Model
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Database for a CGE model

Input-Output Data

Socioeconomic Data

Behavioral Parameters

etc.
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I-O Model and CGE Model
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Limitations of a CGE model

data: not up to date,
inconsistency

difficult to know whether the
model is correct

computation capacity
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I-O Model and CGE Model
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