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APPLY COMPUTABLE GENERAL EQUILIBRIUM (CGE) MODEL. Edition No. 1
VDM Publishing House, June 2009, Pages: 236
The purpose of this work is to introduce the CGE
Model and apply it to measure the impacts
of production activities to the economy. The
expansion of hog production and processing on
the economy of Texas County, Oklahoma, was used as
the case study of this model. The impacts are
evaluated based on the measures of welfare.
Model in the short-run show that when output of Meat
Packing increases 10 times the output of Hog Product
increases 11.54 times while the changes of output of
other sectors are small, and all commodity prices
increase. The measures of regional welfare such as
Gross Regional Product increases 7.21%, indirect
business increases 8.33% and employment increases
10.74%. Results of the long-run show that output of
Hog Product increases 35.04 times when output of
Meatpacking increases 30 times. Output put of Other
Livestock decreases 47% because price of main
intermediate inputs such as Feed Grains and Other
Crops increase. The incremental gain of household
income is small but prices of necessary commodities
decrease cause households welfare gains from 0.34 to
0.55 percent.
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