GTAPinGAMS and GTAP-EG: Global Datasets for Economic Research and Illustrative Models

Thomas F. Rutherford and Sergey V. Paltsev ¹

Department of Economics, University of Colorado ²

Working Paper

September 2000

Abstract

List of Contents

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1  Introduction

The Global Trade Analysis Project (GTAP) is a research program initiated in 1992 to provide the economic research community with a global economic dataset for use in the quantitative analyses of international economic issues. The Project's objectives include the provision of a documented, publicly available, global, general equilibrium data base, and to conduct seminars on a regular basis to inform the research community about how to use the data in applied economic analysis. GTAP has lead to the establishment of a global network of researchers who share a common interest of multi-region trade analysis and related issues. The GTAP research program is coordinated by Thomas Hertel, Director of the Center for Global Trade Analysis at Purdue University. As Deputy Director of this Center, Robert McDougall oversees the data base work. Software development within the GTAP project has been assisted greatly by the efforts of Ken Pearson and other Australian researchers from Centre of Policy Studies, Monash University. (See Hertel [1997], McDougall [1998]. A list of applications based on the GTAP framework can be found at the GTAP home page: http://www.agecon.purdue.edu/gtap/.)

The standard programming language for GTAP data and modeling work has been GEMPACK (Harrison and Pearson [1996]). In the GEMPACK framework the model is solved as a system of nonlinear equations. The present paper describes a version of the GTAP datasets and illustrative models which have been implemented as a nonlinear complementarity problem in the GAMS programming language. This version of the GTAPinGAMS package combines two separate packages GTAPinGAMS (Rutherford [1998]) and GTAP-EG (Rutherford and Paltsev [2000]). Combination of the packages is done due to a development of the new build routine. In addition, users of both packages can save some space and avoid potential confusion with different versions of the programs because both datasets use some similar files. The previous separate versions of these packages can be found at http://debreu.colorado.edu/gtap5/index.html.

Along with the datasets and illustrative models, several ancillary programs for dataset management are developed. These programs should be useful to economists who program in GAMS and wish to use GTAP in applied work. These programs include tools for translation of the GTAP files into GAMS readable form, GAMS programs for dataset aggregation, filtering and the imposition of alternative tax rates on trade or domestic transactions.

The GTAP version 4 database ³ represents global production and trade for 45 country/regions, 50 commodities and 5 primary factors. The data characterize intermediate demand and bilateral trade in 1995, including tax rates on imports and exports. Development of the separate energy-economic dataset is based on the fact that the GTAP data alone are unsuitable for assessing issues such as energy use or climate change (Babiker and Rutherford [1997]). In particular, the GTAP data is at variance with the energy statistics of the International Energy Agency (IEA). In addition, the GTAP database is expressed in terms of values, i.e. price times quantity. The IEA has data on energy quantities, where the energy balances are expressed in a common unit, tonnes of oil equivalent. Information on energy prices and taxes at the level consistent with the GTAP data has been collected by Babiker and Malcolm [1998]. However, since only two out of three variables (price, quantity, value) can be regarded as independent, it is problematic to incorporate both price and quantity data into the GTAP database. Special procedures have been developed in order to incorporate the energy data into the GTAP 4 database. The resulting dataset (called GTAP-EG) is a balanced set of economic accounts (expressed in value terms) which is calibrated to energy quantity and price data.

This paper consists of three sections following this overview. Section 2 describes the GTAP datasets. This section provides information about the data organization and differences between the GTAPinGAMS and GTAP-EG datasets. Section 3 presents the illustrative static models. It starts with a description of the GTAPinGAMS model using Mathiesen's format for the Arrow-Debreu model. This section provides notation and equations describing technology, preferences and equilibrium conditions. It also describes how the GTAPinGAMS model can be expressed in GAMS, either as an MPSGE model or as a system of algebraic equations. This material provides a short but complete overview of how the technology and preferences are calibrated along with GAMS code which performs this task. The GTAP-EG illustrative model, which differs by its energy representation, is also described.

Section 4 has a practical perspective with step-by-step instructions on how to install the GTAPinGAMS package. The intent of this material is to provide as short as possible a learning curve for economists who wish to perform calculations using the GTAP datasets.

This section also describes ancillary GAMS programs which have been developed for use with the GTAP 4 dataset. These include GAMS libinclude programs which read and write GTAP header-array files⁴; FILTER.GMS, a GAMS program which removes small trade flows and intermediate demands from a GTAP dataset to increase sparsity and provide improved computational performance in large scale models; IMPOSE.GMS, a GAMS program which permits arbitrary adjustment of benchmark tax rates with least-squares recalibration; and GTAPAGGR.GMS, a GAMS program which aggregates any GTAP dataset to a smaller number of goods, factors or regions.

Distribution files for the GTAPinGAMS package are located as follows:

• A zip archive ( http://debreu.colorado.edu/gtap/gtapgams.zip).
• A PDF version of this document ( http://debreu.colorado.edu/papers/gtaptext.pdf).

An HTML document which describes the GTAPinGAMS package and provides an access to the distribution files is located at http://debreu.colorado.edu/gtap5/index.html.