Solving applied general equilibrium models represented as a mixture of linearized and levels equations (Q1341879): Difference between revisions

In the past there has been a strong link between the presentation of a general equilibrium model's equations and the method to solve it. The representation as a system of level equations or as a system of linearized equations can both be used to obtain accurate solutions and general-purpose software is available in both cases (GAMS or MPS/GE used by level modellers and GEMPACK by linearizers). Some equations (notably accounting identities) are naturally expressed in the levels while others (like behavioural equations) are naturally expressed in a linearized form. This paper describes the new GEMPACK facility for solving models represented as a mixture of levels and linearized equations and discusses the advantages to modellers of using such a representation.