scholarly journals Constructing the Computable General Equilibrium (CGE) To Analyse the Impact of Goods and Services Tax (GST) on Government Revenue and Targeted Household of M40 and B40 in Malaysia

2019 ◽  
Vol 16 (2) ◽  
Author(s):  
Suriyani Binti Saidi ◽  
Mukaramah Binti Harun ◽  
Norrazman Zaiha Bin Zainol
Keyword(s):  
General Equilibrium ◽  
Policy Analysis ◽  
Computable General Equilibrium ◽  
Research Work ◽  
Future Research ◽  
Cge Model ◽  
Government Revenue ◽  
Model Framework ◽  
Cge Models ◽  
The Impact

Computable general equilibrium (CGE) models have been widely used in economic policy analysis in recent years. The selection of the model is based on the CGE model’s ability to see the effects on sectors, household groups, governments, and even able to see the overall economic impact for a time period. In Malaysia, the issues arise from the impact of policies analysed in the CGE modelling framework have been constrained in part by the completion of a Social Accounting Matrix (SAM). The main purpose of this paper is to propose a new Malaysian CGE model framework to analyse the impact of implementation of GST on government revenue and welfare of targeted household groups of B40 and M40 in Malaysia. The CGE model developed in the present paper is based on more recent data in Malaysian SAM (2014). Then the data was modified to suit with Malaysian CGE for GST, namely the MYGST_CGE model. This paper describes the structure of MYGST_CGE, with 33 activities, 33 commodities, 7 types of labour, and 7 categories of household groups were constructed. The CGE utilized in the present study can be applied to answer questions concerning whether GST implementation would have the trade-off between government revenue and the targeted groups by taking into account the elements of GST such as standard-rate, zero-rate and exempted rate. For the purpose of policy analysis, simulation exercises are conducted using the multi-sectoral, multi-factorial and multi-households approach. Based on the proposed framework model review, the instruments used for measurement of effectiveness and welfare were C-efficiency ratio, regressive, progressive, equivalent variation and simulations. The paper will give an opportunity for future research work in a related area.  

scholarly journals The Issue of Macroeconomic Closure Revisited and Extended

2016 ◽  
Vol 66 (1) ◽  
pp. 1-31
Author(s):  
Ernő Zalai ◽  
Tamás Révész
Keyword(s):  
General Equilibrium ◽  
Open Economy ◽  
Computable General Equilibrium ◽  
Statistical Data ◽  
Competitive Equilibrium ◽  
Numerical Models ◽  
Cge Model ◽  
Sector Model ◽  
Cge Models ◽  
Policy Simulations

Léon Walras (1874) had already realised that his neo-classical general equilibrium model could not accommodate autonomous investments. In the early 1960s, Amartya Sen analysed the same issue in a simple, one-sector macroeconomic model of a closed economy. He showed that fixing investment in the model, built strictly on neo-classical assumptions, would make the system overdetermined, and thus one should loosen some neo-classical conditions of competitive equilibrium. He analysed three not neo-classical “closure options”, which could make the model well-determined in the case of fixed investment. His list was later extended by others and it was shown that the closure dilemma arises in the more complex computable general equilibrium (CGE) models as well, as does the choice of adjustment mechanism assumed to bring about equilibrium at the macro level. It was also illustrated through several numerical models that the adopted closure rule can significantly affect the results of policy simulations based on a CGE model. Despite these warnings, the issue of macro closure is often neglected in policy simulations. It is, therefore, worth revisiting the issue and demonstrating by further examples its importance, as well as pointing out that the closure problem in the CGE models extends well beyond the problem of how to incorporate autonomous investments into a CGE model. Several closure rules are discussed in this paper and their diverse outcomes are illustrated by numerical models calibrated on statistical data. First, the analyses are done in a one-sector model, similar to Sen’s, but extended into a model of an open economy. Next, the same analyses are repeated using a fully-fledged multi-sectoral CGE model, calibrated on the same statistical data. Comparing the results obtained by the two models it is shown that although they generate quite similar results in terms of the direction and — to a somewhat lesser extent — of the magnitude of change in the main macro variables using the same closure option, the predictions of the multi-sectoral CGE model are clearly more realistic and balanced.

scholarly journals DAMPAK KERJA SAMA PERDAGANGAN INDONESIA DENGAN EURASIAN ECONOMIC UNION (EAEU) TERHADAP PEREKONOMIAN INDONESIA

2018 ◽  
Vol 12 (2) ◽  
pp. 161-180
Author(s):  
Deky Paryadi ◽  
Aziza Rahmaniar Salam
Keyword(s):  
General Equilibrium ◽  
Computable General Equilibrium ◽  
Cge Model ◽  
Eurasian Economic Union ◽  
Comparative Advantages ◽  
Vegetable Foodstuffs ◽  
Economic Union ◽  
The Impact ◽  
Eurasian Region ◽  
Elimination Scheme

 Abstrak Kawasan Eurasia merupakan wilayah yang penting secara geopolitik dan geostrategi bagi perdagangan Indonesia. Melihat potensi yang dimiliki oleh negara-negara yang tergabung dalam Eurasian Economic Union (EAEU), Indonesia diharapkan dapat memanfaatkan peluang yang terbuka. Penelitian ini bertujuan untuk mengetahui potensi daya saing komoditas serta dampak kerja sama perdagangan Indonesia-EAEU. Metode analisis yang digunakan adalah Trade Complementary Index (TCI), Revealed Symetric Comparative Advantages (RSCA) dan Computable General Equilibrium (CGE) model dengan data dasar GTAP versi 9 menggunakan enam simulasi. Berdasarkan analisis TCI, tingkat kesesuaian ekspor EAEU terhadap struktur impor Indonesia lebih tinggi dibandingkan ekspor Indonesia terhadap struktur impor EAEU. Dengan melihat dampak kerja sama perdagangan Indonesia-EAEU terhadap makroekonomi Indonesia, penurunan tarif bea masuk sebesar 50% untuk seluruh produk Indonesia dan EAEU merupakan alternatif kebijakan terbaik. Indonesia perlu menjajaki kemungkinan kerja sama dengan EAEU dengan pendekatan berupa eliminasi 50% pada seluruh pos tarif secara bertahap. Selain itu, disarankan Indonesia fokus pada komoditas yang memiliki daya saing di pasar EAEU yaitu sektor animal; vegetable; foodstuffs; plastics/ rubber; raw hides; woods; textile; stone/glass; machinery; dan transportation.AbstractThe Eurasian region is an important area for Indonesia in term of geopolitic and geostrategy. Due to the economic potential of EAEU countries, Indonesia must take advantage of it. This study aims to determine the potential competitiveness of commodities and the impact of trade cooperation between Indonesia-EAEU. Methods used in this study were Trade Complementary Index (TCI), Revealed Symetric Comparative Advantages (RSCA) and Computable General Equilibrium (CGE) model utilizing basic data of GTAP version 9 of six simulations. By using TCI method it was found that the comformity level of EAEU's export to Indonesia's import structure is higher than Indonesia's exports to the EAEU import structure. Looking at the impact of Indonesia-EAEU trade cooperation on Indonesia’s economy, tariff reduction of 50% for all Indonesian products and EAEU is the best policy alternative for Indonesia. Therefore, It is a must to Indonesia to explore the possibility of cooperation with EAEU with a 50% elimination scheme gradually to all tariff lines. Indonesia should also focus on commodities which have competitiveness in EAEU market i.e. animal; vegetable; foodstuffs; plastics/rubber; raw hides; woods; textile; stone/glass; machinery; and transportation.

scholarly journals Integrated Model of Computable General Equilibrium and Social Cost Benefit Analysis of an Indian Oil Refinery: Future Projections and Macroeconomic Effects

2018 ◽  
Vol 10 (1-2) ◽  
pp. 96-125
Author(s):  
Sumana Chaudhuri ◽  
Shovan Ray ◽  
Ganesh-Kumar
Keyword(s):  
General Equilibrium ◽  
Computable General Equilibrium ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Oil Refinery ◽  
Cge Model ◽  
Benefit Analysis ◽  
Model Framework ◽  
Financial Flows ◽  
Macroeconomic Effects

Cost benefit analysis (CBA) has long been used as a useful tool to appraise and evaluate the value of a range of investment projects to a society. Certain aspects of this method such as the appropriate discount rate is an important concern, because the choice of discount rates deeply affect the valuations of future income streams. Other aspects concerning financial flows and appropriate ‘shadow prices’ have also received considerable attention. However, when a megaproject with the character of a ‘universal intermediate’ is considered, its multiplier effects may be wide-ranging and permeate several economic and social layers and may be captured only in the aggregates. This study examines the costs and benefits of Vadinar refinery in Gujarat with a focus on this welfare dimension on society for the project. The framework explores a methodological breakthrough in CBA studies. In constituting the macroeconomic effects of expansion of the mega oil refinery, the wider economic impact (WEI) is estimated using the computable general equilibrium (CGE) model and incorporated into the CBA. This assimilation of CBA with macroeconomic externality obtained from the CGE model framework is perhaps only one of its kind in economic analysis of major infrastructure projects of any country. CBA when combined with CGE as an analytical tool can be gainfully employed to appraise or evaluate large scale projects like oil refineries. JEL Classification: B41, C51, C52, C53, C54, C55, D50, D58, D60, D61, D62, H23, H43, L71, O22, Q43

scholarly journals EFFECTS OF INTEGRATING DIRECT CASH AID INTO FUEL SUBSIDY REMOVAL IN THE DOMESTIC COMMODITY MARKET IN MALAYSIA USING COMPUTABLE GENERAL EQUILIBRIUM (CGE) MODEL

2019 ◽  
Author(s):  
Loo Sze Ying ◽  
Mukaramah Harun
Keyword(s):  
General Equilibrium ◽  
Computable General Equilibrium ◽  
Complete Removal ◽  
Cge Model ◽  
Sudden Increase ◽  
Consumer Expenditure ◽  
Fuel Prices ◽  
Consumer Prices ◽  
Future Economic Development ◽  
The Impact

Direct cash aid has been introduced to protect the poor from the impact of rising fuel prices in efforts to remove subsidies in Malaysia. Thus, this paper is aimed at evaluating the changes in prices and quantities of consumer commodities produced by 17 sectors in response to the integration of direct cash aid into fuel subsidy removal. Specifically, the direct cash aid was a reallocation of saved resources through the complete removal of fuel subsidy. This study was carried out using the Lofgren-based computable general equilibrium (CGE) model, by simulating the before and after imposition of fiscal integration. With the withdrawal of government fuel subsidy, the findings showed that recipients of the cash aid tended to spend on basic necessities such as food and beverages, and petrol (for individual vehicle consumption). Nonetheless, the sudden increase in consumer expenditure led to higher consumer prices as current supplies was unable to catch up with increase in demand. Thus, it is advisable to have other effective, concurrent development programs to stimulate future economic development. Keywords:  Fuel subsidy removal, Direct cash aid, Computable general equilibrium (CGE) model.

scholarly journals Contribution of VAT to economic growth: A dynamic CGE analysis

2021 ◽  
Vol 43 ◽  
pp. 26-55
Author(s):  
Jean Luc Erero ◽  
◽  
◽  
Keyword(s):  
General Equilibrium ◽  
Impact Assessment ◽  
South African ◽  
Computable General Equilibrium ◽  
Income Tax ◽  
Cge Model ◽  
The South ◽  
Dynamic Cge ◽  
The Impact ◽  
Dynamic Computable General Equilibrium

Aim/purpose–This study sought to assess the impact of an increased historical fixed VAT rate of 14% to the current rate of 15% on the South African economy. Design/methodology/approach–The method applied in this study was based on a Dynamic Computable General Equilibrium (CGE) model to evaluate the impact of both the VAT rate of 14% and a new rate of 15% on the South African economy. The CGE model has been proven over the years to be a suitable model when evaluating the impact assessment of any shock within an economy. Enhancements were made by the researcher to the direct and indirect tax section of the model, i.e., the direct tax section was disaggregated, such that for both firm and household revenues, a dividend income stream is separated from other income streams. The main reason is to facilitate a detailed analysis of Corporate Income Tax (CIT) and Personal Income Tax (PIT), as well as the latest implemented Dividend Tax (DT).Findings–When VAT was increased from 14% to 15%, the immediate reaction of the shock from the Dynamic CGE model indicates that the Gross Domestic Product (GDP) declined by 0.0002% in 2018, but increased by 0.0028% in the following year (2019). The trend continued until 2021, hence the 1% increase in the VAT tax rate will increase the expected forecast of VAT collection by approximately R3.2 billion on average. Research implications/limitations–The findings of this study will be implemented by the South African government, which will use a dynamic CGE model to assess South Africa’s VAT contribution to the economy. The database of the CGE model was limited to the Social Accounting Matrix (SAM) for 2015. Originality/value/contribution–The study recommends the use of this method for assessing the impact of tax policy changes to the South African economy. The CGE model seems to be the best model as far as the impact assessment of a shock in the econ-omy is concerned. This will assist the South African authorities with their decision mak-ing regarding future VAT revenue. Keywords: South African Revenue Service (SARS), Value Added tax (VAT), Dynamic computable general equilibrium (CGE) model.JEL Classification:H21, C68, E62.

scholarly journals DAMPAK PEMBERLAKUAN BEA KELUAR TERHADAP KINERJA EKSPOR SEKTOR KELAUTAN DAN PERIKANAN INDONESIA

2016 ◽  
Vol 11 (2) ◽  
pp. 185
Author(s):  
Estu Sri Luhur ◽  
Tajerin Tajerin
Keyword(s):  
General Equilibrium ◽  
Computable General Equilibrium ◽  
Raw Materials ◽  
Export Performance ◽  
Value Added ◽  
Processing Industry ◽  
Cge Models ◽  
Primary Products ◽  
Fishery Products ◽  
The Impact

Indonesia merupakan salah satu negara eksportir produk perikanan terbesar di dunia dengan komoditas unggulan udang, tuna, dan rumput laut. Namun, komoditas ekspor Indonesia masih didominasi oleh produk primer berupa bahan mentah sehingga nilai ekspor masih rendah. Tulisan ini bertujuan untuk menganalisis dampak pemberlakuan bea keluar terhadap produk primer perikanan terhadap kinerja ekspor sektor kelautan dan perikanan sebagai salah satu cara mengatasi permasalahan tersebut. Kajian ini menggunakan data sekunder dengan mengambil Tabel I-O tahun 2008 yang kemudian disusun dalam bentuk computable general equilibrium (CGE) dengan menggunakan model Orani-G. Komoditas yang dianalisis adalah ikan TTC, ikan tangkap lainnya, patin, kerapu, rumput laut, budidaya lainnya, udang, ikan kering dan ikan olahan. Kajian ini menggunakan simulasi dengan tiga skenario pemberlakuan bea keluar, yaitu 7,5% (sim-1), 15% (sim-2), dan 22,5% (sim-3). Hasil kajian menunjukkan bahwa skenario 3, yaitu pemberlakuan tarif bea keluar 22,5% memberikan dampak terbesar terhadap kinerja makroekonomi di antaranya  peningkatan GDP 0,01% dan konsumsi rumah tangga sebesar 0,046%. Dampak terhadap kinerja sektoral: 1) output dan nilai tambah produk primer perikanan mengalami penurunan terbesar pada ikan TTC sebesar 0,68%, sedangkan output dan nilai tambah produk olahan perikanan mengalami peningkatan terbesar pada ikan olahan sebesar 0,72%; 2)  ekspor produk primer perikanan mengalami penurunan terbesar pada udang sebesar 35,81%, sedangkan ekspor produk olahan perikanan mengalami peningkatan terbesar pada ikan olahan sebesar 2,41%; 3) impor produk primer perikanan produk olahan perikanan mengalami penurunan terbesar pada udang sebesar 23,09%.Title: Impacts of Export Duties to Marine and Fisheries Sector’s Export PerformanceIndonesia has one of the largest exporters of fisheries products in the world with leading commodity shrimp, tuna and seaweed. However, Indonesia's exports are still dominated by primary products such as raw materials so that the value of exports is still low. On the other hand, the development of fishery processing industry in the country is still plagued by a lack of supply of raw materials so that to this day processing industry relies heavily on imported products. This paper aims to analyze the impact of the imposition of export duties on primary products of fisheries on the export performance of marine and fisheries sector as one way of addressing the issue. This study uses secondary data by taking the 2008 IO table is then compiled in the form of Computable General Equilibrium (CGE) models using Orani-G. Commodities are analyzed TTC fish, catch more fish, catfish, grouper, sea grass, other farming, shrimp, dried fish and fish preparations. This study uses three scenarios simulated with the imposition of export duties, ie 7.5% (sim-1), 15% (sim-2), and 22.5% (sim-3). The results show that the impact of the imposition of export duties on macroeconomic performance including 0.01% increase in GDP and household consumption amounted to 0.046%. Impact on sectoral performance: 1) output and value added fishery primary products experienced the largest decline in fish TTC 0.68%, while the output and value added processed fishery products experienced the largest increase in fish preparations of 0.72%; 2) export of primary products fishery experienced the largest decline in shrimp by 35.81%, while exports of processed fishery products experienced the largest increase in fish processed by 2.41%; 3) imports of primary products fishery processed fishery products experienced the largest decline in shrimp at 23.09%.

Modelling regional general equilibrium effects and irrigation in Canterbury

Water Policy ◽  
2010 ◽  
Vol 13 (2) ◽  
pp. 250-264 ◽  
Author(s):  
James Alexander Lennox ◽  
Olga Diukanova
Keyword(s):  
Water Supply ◽  
General Equilibrium ◽  
Computable General Equilibrium ◽  
Water Allocation ◽  
Cge Model ◽  
Water Demands ◽  
Use Values ◽  
The Impact ◽  
Provisional Data ◽  
Modelling Approach

We describe the development of a regional computable general equilibrium (CGE) model for the analysis of issues concerning water supply and (re)allocation in Canterbury, New Zealand. Traditionally, water has been seen as an abundant resource, but growing irrigation demands are now outstripping the supply of water and competing with in-stream uses and non-use values. In the longer term, this problem may be exacerbated by climate change, which is predicted to increase water demands and reduce supply in parts of Canterbury. It is important to be able to quantify the impact on the regional economy of changes in water availability and policies and other measures addressing water supply or demand. A particular concern is the current, relatively inflexible, ‘first-come, first-served’ system for water allocation. In this paper, we present some preliminary scenarios focusing on a reduction of irrigation supply and the interaction with changes in rainfall. These results are intended only to illustrate the potential of the modelling approach, not least because the provisional data to which the model is currently calibrated are in many cases dated or incomplete. We discuss how the model and its underlying database may be improved and extended to provide results that are qualitatively robust and policy-relevant.

scholarly journals The Impact of ASEAN Economic Community on the Textile and Clothing Industry in Indonesia

2019 ◽  
Vol 12 (1) ◽  
Author(s):  
Agustinus Edi Sutarta ◽  
Albertus Girik Allo
Keyword(s):  
General Equilibrium ◽  
Computable General Equilibrium ◽  
Clothing Industry ◽  
Cge Model ◽  
Economic Community ◽  
Freedom Of Movement ◽  
Asean Economic Community ◽  
The Impact

ASEAN Economic Community (AEC) has implemented in 2015. Implementation of AEC means there will be freedom of movement of goods, labor, and capital among the members of the AEC. This study aims to evaluate the impact of the implementation of AECs in the textile and clothing (T&C) industry in Indonesia. We used computable general equilibrium (CGE) model with model GTAP version 8 to evaluate this impact. This study showed that the country will enjoy the greatest benefits of the liberalization of the T&C industry of AEC regions are Vietnam, followed by Thailand and Indonesia.

A comparison of economic impact assessment methods: the case of forestry developments in Alberta

1998 ◽  
Vol 28 (5) ◽  
pp. 711-719 ◽  
Author(s):  
Janaki RR Alavalapati ◽  
Wiktor L Adamowicz ◽  
William A White
Keyword(s):  
General Equilibrium ◽  
Policy Analysis ◽  
Impact Assessment ◽  
Economic Impact ◽  
Computable General Equilibrium ◽  
Economic Impacts ◽  
Forest Policy ◽  
Input Output ◽  
Cge Models ◽  
Economic Impact Assessment

Economic impacts of forestry developments in Alberta are estimated using two interindustry approaches. The results suggest that estimates derived from input-output (I-O) models differ from those of computable general equilibrium (CGE) models. Employment and GDP estimates derived from CGE models are much smaller than those of I-O models. Unlike I-O estimates, estimates derived from CGE models are not unidirectional because of general equilibrium effects. The results also indicate that CGE models provide greater flexibility and have more potential for forest policy analysis when compared with I-O models, but they should be used with caution.

Sign in / Sign up

Export Citation Format

Share Document