Introduction

Over the past decades, there has been a convergence of interest in the global farm and food system and its contributions to feeding the world’s population as well as to ensuring the environmental sustainability of the planet. This has underscored the vulnerability of the global food system to shocks from extreme weather events, health, energy and financial markets, as well as government interventions in the form of export bans and other measures designed to prevent domestic adjustment to global scarcity. We have learned that a “perfect storm” in which all these factors coincide can have a severe impact on the world’s poor, as well as putting considerable pressure on the global natural resource base. As we look ahead to the middle of this century, will the world’s resources be up to the task of meeting the diverse demands being placed on it?

In light of these challenges facing the world’s natural resource base, this course will explore how models can help policy makers deal with these global challenges. The course will explain how Computable General Equilibrium (CGE) models specifically can be build and applied to policy questions. CGE models are large numerical models which combine economic theory with real economic data in order to derive computationally the impacts of policies or shocks in the economy.

CGE models fit economic data to a set of equations which aim to capture the structure of the economy and behavioural response of agents (firms, households, government). This provides a framework to simulate policy changes and trace the impact on key economic variables, including income and expenditure flows.

In this course students will learn the CGE programming language GEMPACK (General Equilibrium Modelling PACKage, comparable GAMS), which has been specifically designed for general equilibrium analysis, and learn to understand the logical structure of a CGE model. In between students will learn something about the well-known GTAP database describing the world in a consistent manner, and about sound programming and modelling practices.

Apart from the practical side, students will learn how MAGNET (Modular Applied GeNeral Equilibrium Tool) a well-known CGE model build by WECR has been used for a large number of policy questions and how MAGNET has been extended with modules looking at the bio economy, waste, greenhouse gas emissions and climate change (https://magnet-model.netlify.app/).

Learning outcomes

After successful completion of this course, participants are expected to be able to:

• • Understand the concept of CGE modelling
  • Get skills on how to build CGE model using GEMPACK programming language which is especially suitable for computable general equilibrium (CGE) models, but can handle a wide range of economic behaviour.
  • How to apply CGE models in policy relevant areas
  • To understand how CGE modelling can help in identifying trade-offs between various global challenges like food security, climate change. Identify the advanced modules such as the flexible production structures of a macroeconomic CGE model (MAGNET). Other modules deal with bioeconomy (sector splits), waste, food security, segmented factor markets and land use.
  • Interpreted results used in policy studies based on this type of models and identify the fundamental drivers change and identify indicators that cover a safe and just operating space for the global food system.
  • Understand what these models can do and what they cannot do (i.e. strength and weaknesses).

Activities

The course will be a combination of lectures, practical’s, reading assignments, and discussion groups. The mix between lectures and praticals, reading assignments and discussion groups will be about half-half.

During the lectures the students will be familiarized with the relevant literature and the recent scientific debates on the topic. Controlled economic lab experiments will be done by using a new build CGE model by the course participant. During the practical students will be familiarized with the relevant methodology and apply the economic models (ex-ante assessment) discussed during class (albeit at an introductory level to familiarize the students with the conceptual model that should allow them to further develop those for their own research). The MAGNET model will be introduced by lectures and by analyzing scenario results. In the field of ‘Global Change and the Challenge of Sustainably Feeding a Growing Planet’.

Schedule

Coffee break is from 10.30-10.45, lunch break is from 12.15-13.00 hrs.

Target group

Advanced MSc/PhD students. Min. 10 students, Max: 20 students.

Wageningen MSc students: - MME – Management, Economics, and Consumer Studies

- MID – International Development Studies

- MES – Environmental Sciences, students with a specialization in economics

- New MSc Biobased Sciences for students with a specialization in economics

PhD candidates: from AEP, BEC, DEC, ENR, MCB, BMO, UEC.

Assumed prior knowledge

• Economics-Course (particular subject matter)
• Micro-economic theory (consumption and production)
• Mathematical economics (optimization and basic functional forms)

Computer power:

64-bit Windows 7 or higher; at least 4 GB RAM and 2GB hard disk space.

Course fees

The course fee includes additional training material, coffee/tea, lunches.

Cancellation conditions:

Participants can cancel their registration free of charge 1 month before the course starts. A cancellation fee of 100% applies if a participant cancels his/her registration less than 1 month prior to the start of the course.

The organisers have the right to cancel the course no later than one month before the planned course start date in the case that the number of registrations does not reach the minimum.

The participants will be notified of any changes at their e-mail addresses.