The Macro-economic Simulation System Of China Based On CGE Modeling

Computable general equilibrium (CGE) models are a class of economic model that use actual economic data to estimate how an economy might react to changes in policy, technology or other external factors. It has become the major instrument for ecomonic policy simulation since 1970s. We build a multisector simulation system for policy analysis based on CGE models.This system can give timely and effective simulation result to the policy-makers and researchers.We reviewed the development of policy simulation and the general equilibrium theory in chapter I. And we discussed the structure and closure theory of CGE model.In chapter II, we discussed the assumptions of our model and build a CGE model of China.We also gave a detail description of the model equations. We chose the Johansen-Euler method as the algorithm of our CGE model, according the stability of algorithm. In a word, the design of solving algorithm should be satisfy the object of system.CGE model has a lot of parameters.It also needs actual economic data.In order to simulate the Policy implications, we must determine these parameters. So, in Chapter III, we established a social accounting matrix (SAM) of China, which is a main Data source of our model.Using the SAM and other data, we determined the parameters and data in our model.In chapter IV we developed the policy simulation system of macro-economics., we pursued a friendly user interface. In terms of the choice of developing mode, we adopted the mature visual program language VS.NET and ADO.NET data access technique. At last, we used Gauss-Jordan algorithm to solve the model equations. Users can choose the module of the platform and then input the change of the exogenous variables. The soft can solve the model and display the results.In chapter VI and chapter VII, we simulated some policy changes of Chinawith the platform we have developed and get some conclusions. The results are as follows:When RMB exchange rate decline, the income of the rural residents will decrease .But the income of the urban residents has a increase .The decline of RMB exchange rate also make the government revenue and the GDP lower.The reduction of import tariff does not lead to the increase of imported products. On the contrary, the number of imported products drops 0.15 percent. GPD increased by about 0.18 percent, after import tariff droped 10%. The agricultural sector is the The increase of import tariffs in the agricultural sector do make imported products in the agricultural sector increase.If China increase its carbon sinks to achieve the object of climate protection, when the rate of CO₂ emissions reduction is negative or 0 (China does not reduce CO₂ emissions), the change of China's GDP is relatively small. But in the case of emission reduction, China's GDP will drop.The charge of carbon tax will also reduce China's GDP.