GAMS: Introduction

Introduction to General Equilibrium Modeling with GAMS/MPSGE

MPSGE is a mathematical programming system for general equilibrium analysis which operates as a subsystem within GAMS. MPSGE simplifies the modeling process and makes AGE modeling accessible to any economist who is interested in the application of these models. In addition to solving specific modeling problems, the system serves a didactic role as a structured framework in which to think about general equilibrium systems.

This course is intended for students who want to use numerical modeling for simulation analysis of theoretical models. The course will provide an introduction to applied (numerical) general equilibrium (GE) models constructed using MPSGE with GAMS. We recommend, however, that students should not only be familiar with first year graduate courses in microeconomics and macroeconomics but also with GAMS programming.

Part 1: Introduction

• Software installation
• Rudiments of GAMS programming

Part 2: Getting started with applied general equilibrium

• The conceptual framework
• Economic principles underlying the formulation of numerical GE models
• An introduction to the complementarity format

Part 3: Getting Started with MPSGE

• An introduction to MPSGE: A non-algebraic language for GE modelling
• A specialized modeling language for Arrow-Debreu equilibrium modelling: motivation, simple example of model building

Part 4: General Equilibrium Modeling under MPSGE: Part 1

• The basic MPSGE of standard Arrow-Debreu models with perfect competition
• Incorporation of activity analysis
• Government policy : tax policy analysis (e.g., equal yield tax reforms)
• Different households (equity issues)

Part 5: General Equilibrium Modeling under MPSGE: Part 2

• Open economy models with tariffs and quotas
• Single-country models
• Multi-regional trade models with biltateral trade flows

Part 6: Application

• Open economy analysis: exercises with trade liberalization and integration policies

Related topics:
GAMS Definition