Condensation

Most serious CGE models, in their raw form, have too many equations and variables for efficient solution. Their numbers are reduced by instructing the TABLO program to:

•omit specified variables from the system. This option is useful for variables which will be exogenous and unshocked (zero percentage change). Normally it allows us to dispense with the bulk of the technical change terms. Of course, the particular selection of omitted variables will alter in accordance with the model simulations to be undertaken.

•substitute out specified variables using specified equations. This results in fewer but more complex equations. Typically we use this method to eliminate multi-dimensional matrix variables which are defined by simple equations. For example, the variable:

(All,c,COM)(All,i,IND) x1_s(c,i) # Demands for Commodity Composites #;

could be substituted out of the model using the equation:

Equation E_x1_s # Demands for Commodity Composites #

(All,c,COM)(All,i,IND) x1_s(c,i) = a1_s(c,i) + a1tot(i) + x1tot(i);

It is a good idea to choose each equation name (E_x1_s) to suggest which variable (x1_s) it could eliminate (see also closure).

Substituted variables do not appear in the solution file. You can also back-solve variables. This works just the same as substitution, except that back-solved variables do appear in the solution file. However, neither back-solved nor substituted variables may be exogenous.

URL of this topic: www.copsmodels.com/webhelp/tabmate/hc_condense.htm

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