Spatial computable general equilibrium modelling : static and dynamic approaches

Abstract: This thesis concerns both static and dynamic modeling in a spatial computable general equilibrium setting. First, we have applied a static framework for the assessment of economic impacts of the Öresund bridge. Secondly, we make an attempt to enhance the static framework through the introduction of economic dynamics. In the first paper we study the economic impacts of the Öresund bridge. We aim to quantify regional welfare effects as well as effects on regional production and trade. We calibrate a static spatial computable general equilibrium model to economic data representing the Öresund region. In particular we have calibrated a pre-bridge barrier parameter which enables us to study possible barrier reduction effects from the bridge. We present results both as effects of cross strait transport cost reductions and of barrier reductions. It is found that the potential impacts of removing barriers to trade may outweigh the impacts solely due to reduced transport costs. In the second paper we consider different specifications of a dynamic spatial computable general equilibrium model. In particular we are interested in the effects of different, commonly used assumptions on transition dynamics of such a model. We have specified models with different assumptions regarding capital mobility, the utility specification of the households and assumptions regarding perfect foresight or myopia. A number of simulations have been performed with these models in order to observe policy responses and in order to be able to make specification comparisons of the different models based on those responses. We consider the time in takes for the dynamic models to converge toward the long term steady state to be of importance for welfare assessment of policies and find that convergence may be slow depending on both the model and the policy considered.