The SIMPLE Model
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J.F. Francois, Tinbergen Institute and CEPR |
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© J.F. Francois, 1998-2003 |
Running the SIMPLE Model
with WinGEM and GEMPACK:
Many of the
CGE exercises here involve a compiled and modified version of the GTAP model,
called SIMPLE. The model is based on the GEMPACK version of the core GTAP model
with significant modifications. It has been compiled so as to run independently
(for this 2x3 application only). If you place all of the files from this
archive into a single directory and follow the directions below, you should be
able to run the model without additional software. To modify the theory, you
will need to obtain a licensed version of GEMACK. Model files are found in the
subdirectory "simple" on the CD-ROM in the "course"
directory, and installed under the "course" directory on the C: drive
if the course material has been installed from the CD-ROM.
WinGEM: Because the
SIMPLE model is compiled, you do not need a full version of GEMPACK. However,
you do need to install the Windwos front-end for GEMPACK, known as WinGEM.
WinGEM is a free utility, and can be installed from the course CD. Installing
WinGEM will place a GEMPACK program group under the Windows start menu, and a
WinGEM icon on your front desk. Once you have loaded WinGEM, you will see a
WinGEM progam menu bar across the top of your screen.
- You can view an image of
the WinGEM toolbar here:
view image
Setting
the directories: Once you have started WinGEM, you will need to set up the working
directory. Running the SIMPLE model involves using the "RUN TG"
option. From the menu, choose "Simulation: Run TG".
- You can view an image of
the WinGEM toolbar here, "Simulation: Run TG" selection here: view image
Your next
step involves changing both the working and default directory to the one where the
SIMPLE model files are kept. This is usually c:/course/simple.
- You can view an image of
the WinGEM toolbar here when setting the default directories here: view image
- You can view an image of
the actual selection of the directory here: view image
Selecting
the experiment file: Your next step involve selecting the model that you
will be running. From the "Simulation: Run TG" menu, you need to select
a model file.
- You can view an image of
the WinGEM toolbar here when selecting the SIMPLE model file: view image
Finally,
you are ready to run the model. This involves selecting an experiment file. The
experiments are contained in command files, all of which have the name *.cmf
(as in EXP3.cmf). *.CMF FILES
- You can view an image of
the WinGEM toolbar here when selecting the experiment file: view image
You
must run EXP0.CMF first: The experiment EXP0 sets up the standard closure
(i.e. theoretical structure) employed by all of the other model files. You need
to run this experiment before running any other experiments.
Viewing
social accounting data: Note that the model data (including a file in SAM
format) can be viewed with the utility "Viewhar", reachable from the
WinGEM menu under HA Files.
An Overview of the
Experiments
The
experiments are all defined through command files. When running this model,
model feautures are manipulated through a mix of policy shock
"switches", paramater file modifications, and closure
"switches."
A full
list of the experiments is provided below:
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EXP1.CMF |
Global free trade under non-nested GTAP model |
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EXP2.CMF |
Same experiment, with IRTS and AC pricing in manufacturing |
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EXP3.CMF |
Same experiment, with large group monopolistic competition in sector 2 |
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EXP4.CMF |
Same experiment, with cournot behaviour and CRTS in manufacturing |
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EXP5.CMF |
Same experiment, with cournot and IRTS in manufacturing |
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NOTE!! You must run INSERT1.CMF and INSERT2.CMF before EXP4,5,6,11 |
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EXP6.CMF |
Same model as EXP5.CMF, but with change in competition policy. Experiment EXP6 involves a change in Japanese competition policy, involving a shift in the allowed degree of collusion in manufacturing from relatively collusive (halfway between perfect competition and monopoly pricing) to something very close to perfect competition. The model structure is identical to that employed in EXP5.CMF. |
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EXP7.CMF |
Global free trade under the standard (nested) GTAP model |
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EXP8.CMF |
Same as EXP1, but with steady-state capital stock adjustment under classical savings behaviour |
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EXP9.CMF |
Same as EXP1, but with steady-state capital stock adjustment under Ramsey-type savings behaviour EXP10.CMF Same as EXP1, but with rigid real wages EXP11.CMF Same as EXP5, but with steady-state capital stock adjustment under classical savings behaviour EXP12.CMF Same as EXP9, but with global capital markets. This is a very unrealitisic experiment (even more so than most other CGE experiments!!!) but does demonstrate the long-run implications of capital mobility. Global trade liberalization tends to boost the productivity of capital, in ROW and also in Japan. At the same time, there is an induced substitution away from savings in Japan. The result is a sizeable inflow of capital into Japan from the rest of the world (even as there is capital accumulation globally and in both regions.) The result is an improvement in the steady-state Japanese trade balance of approximately $100 billion, as Japan must pay for this capital. Of course, this also implies that, in the medium-term, the trade balance deteriorates as Japan initially draws down and consumes it holdings of global capital. This experiment is benchmarked from an assumption that in initial data, shares of global capital stocks are equal, in value, to installed domestic capital, AND that capital is a perfect substitute between regions for all investors. Of course, this is not really true, so that this closure may greatly overstate the likely capital market effects. |
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EXP0.CMF |
This is not really an experiment, but rather a solving of the model to set-up default model closure (i.e. what is endogenous and what is exogenous.) |
Note:
Experiments 1,2,4,5,6 involve national product differentiation (the Armington
assumption), while experiment 3 involves firm level product differentiation.
For these experiments, the Armington structure is non-nested, to accomodate the
theory in the model on cournot pricing (which involves non-nested Armington).
Once you
have run the model, you can view the resuls using VIEWSOL. WinGEM will give you
the option to choose VIEWSOL.
- You can view an image of
the model as it is runing here: view image
- You can view an image of
the WinGEM toolbar after the model has run, and you have been given a
chance
to view results, here:view image
VIEWSOL
is a graphic utility for examining model results.
- When you first select VIEWSOL
(and after the quote of the day flashes on the screen) you will see this
screen: view image
- When you choose a
particular data element, you see a screen like this: view image
Note that, for elements with more than two dimensions, you can change the set elements you are looking at from the pull-down set menus. - After you are viewing a
set of data elements, right clicking the mouse from a given element header
will automatically present the data vector graphically. view image
- You also have the option
to select more data for comparison, and to change the way the data are
presented graphically: view image
- NOTE: If you are working
with the exectuable image (i.e. free) version of GEMPACK, VIEWSOL and
VIEWHAR functionality will be limited, and the graphic elements may not
work fully (sorry).
Technical notes on the SIMPLE
model
Beyond the GTAP model, the model code provided with this file (in the file
SIMPLE.TAB) also allows for monopolistically competitive industries (i.e.
firm-level product differentiation), cournot competition under constant and
increasing returns, contestable markets with scale economies and average cost
pricing, steady-state adjustment to capital stocks under classical and
Ramsey-type savings behaviour, steady-state closures with a crude specification
of global capital markets, and short-run sticky wage closures.
The aggregation of this model is based on a 2 region, 3 sector version of the
GTAP dataset. Much larger aggregations are possible, and many additional
aggregations are available from the GTAP consortium from its web site at:
http://www.agecon.purdue.edu/gtap.
The GTAP database is constantly being revised. More current versions of the
SIMPLE model files, for later GTAP database versions, are available upon
request to francois@few.eur.nl .
Supporting
documentation for the theory underlying this model is available from the
following sources:
[1] J.F. Francois,
B.McDonald and H. Nordström (1996). 'Liberalization and Capital Accumulation in
the GTAP Model.' GTAP consortium technical paper number 7, 1996.
[2] J.F. Francois
(1998). 'Scale Economies and Imperfect Competition in the GTAP Model."
GTAP consortium technical paper number 14, 1998.
[3] Hertel, T.W.
and Tsigas, M. (1996) "The Structure of GTAP," in T.W. Hertel, ed., Global Trade Analysis, Cambridge
University Press, Chapter 2.
Theory for
the core model (perfect competition, static, constant-returns-to-scale) and the
underlying notation is explained by Hertel and Tsigas. The other two papers
([1] and [2]) focus on imperfect competition and capital accumulation.
Model Regions and
Sectors
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regions |
sectors |
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Japan Rest of World |
primary production manufactures services |
Running
the Model in DOS
As an alternative, you can also run the model in DOS. To do this, you need to
read the readme.lst file contained in the SIMPLE directory.
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DOCUMENTATION FILES |
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README.1st |
Documentation for DOS-based work with the model |
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MODEL FILES |
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SIMPLE.AXS |
TABLO generated file for SIMPLE.EXE |
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SIMPLE.AXS |
TABLO generated file for SIMPLE.EXE |
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SIMPLE.EXE |
executable version of the model SIMPLE |
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SIMPLE.TAB |
The theory, in GEMPACK code, of SIMPLE |
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SIMPLE.STI |
For GEMPACK users, the condensation file |
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SIMPLE.MIN |
Fortran/GEMPACK files for the compiled model |
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SIMPLE.MOD |
Fortran/GEMPACK files for the compiled model |
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SIMPLE.LIB |
Fortran/GEMPACK files for the compiled model |
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SIMPLE.INF |
Fortran/GEMPACK files for the compiled model |
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SIMPLE.F9M |
Fortran/GEMPACK files for the compiled model |
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DATASET/PARAMETER FILES |
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GDAT.HAR |
the original aggregated GTAP dataset |
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GSET.HAR |
the GTAP set definitions |
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GDAT.EX4 |
Dataset produced by INSERT1.CMF and used by EXP4.CMF |
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GDAT.EX5 |
Dataset produced by INSERT2.CMF and used by EXP5.CMF and EXP6.CMF |
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SMALL.TXT |
GTAP database aggregation definition file |
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GPAR%.DAT |
Parameter file for EXP%.CMF |
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EXP%.DAT |
Additional data/paremeters for experiment EXP%.CMF |
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MARK-NO.DAT |
The MARK#.DAT files are for definition of Cournot |
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MARK-MJ.DAT |
sectors through a switch that turns on markups. |
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SAM.HAR |
The data in SAM format. |
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SHOCK FILES |
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TMSHAT.SHK |
Import tariff shock file for free trade |
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TOHAT.SHK |
Ouput subsidy shock file for free trade |
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TXSHAT.SHK |
Export tax shock file for free trade |
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OTHER FILES |
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INSERT1.CMF |
Recalibration for Cournot competition, CRTS |
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INSERT2.CMF |
Recalibration for Cournot competition, IRTS |
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CLEANUP.BAT |
A simple utility for cleaning up after GEMPACK simulations. This cleanus up manyf of the files left over after a GEMPACK simulation. |
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