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Multi-regional Economic Modeling: Applications for Mexico

Multi-regional Economic Modeling: Applications for Mexico

January 22-23, 2020 – Centro de Investigación y Docencia Económicas, Ciudad de México, Mexico

Lecturer: Prof. Eduardo Amaral Haddad – University of Sao Paulo (Brazil)

Teaching Assistant: Inácio Fernandes de Araújo - University of Sao Paulo (Brazil)

Eduardo Amaral Haddad is Full Professor at the Department of Economics at the University of Sao Paulo, Brazil, where he directs the Regional and Urban Economics Lab (NEREUS). He also holds a position as Affiliate Research Professor at the Regional Economics Applications Laboratory – REAL – at the University of Illinois at Urbana-Champaign, USA. He is a Senior Fellow at the Policy Center for the New South, Rabat, Morocco, and President Elect of the Regional Science Association International (RSAI). Professor Haddad has published widely in professional journals on regional and interregional input-output analysis, computable general equilibrium modeling, and various aspects of regional economic development in developing countries; he has also contributed with chapters in international books in the fields of regional science and economic development. His research focuses on large-scale modeling of multi-regional economic systems, with special interest in modeling integration applied to transportation, climate change and spatial interaction. Professor Haddad received his B.A. in Economics from the Federal University of Minas Gerais, Brazil, in 1993 and his Ph.D. in Economics from the University of Illinois at Urban-Champaign in 1997. In 1998 he held a post-doctoral position at the University of Oxford. He has served as the president of the Brazilian Regional Science Association (2008-2010), and as the first president of the Regional Science Association of the Americas (2008-2010). He was the Director of Research of the Institute of Economic Research Foundation – FIPE – from 2005 to 2013. He has spent the period January 2014 to June 2015 on sabbatical as a visitor at the Department of Economics (International Economics Section) at Princeton University, and at the Edward J. Bloustein School of Public Policy and Planning at Rutgers University.

Inácio Fernandes de Araújo is a Post-Doc researcher at the Department of Economics and the Regional and Urban Economics Lab (NEREUS) at the University of Sao Paulo, Brazil. His major research interests lie in the field of the regional analysis. He has experience in the implementation and application of economic models, especially input-output and computable general equilibrium models.


Course Outline

The course aims to introduce participants to the ideas and techniques of multi-regional economic modeling, and to equip them to start using the BMMX ICGE model, adapting such model for their own simulations. By the end of the course, participants will have been introduced to:

  • the theory and applications of interregional input-output models for policy analysis
  • the theory underlying the BMMX ICGE model
  • the basic structure of the BMMX ICGE model
  • the representation of the BMMX ICGE model in the notation used in GEMPACK
  • the data requirements of the BMMX ICGE model
  • formulating exogenous scenarios
  • computing simulations for policy analysis
  • interpreting and reporting results



Day 1 (January 22) – Introduction to CGE modeling

9:00-9:15: Course welcome and introductions

9:15-10:30: Structure of a CGE model

10:30-11:00: Coffee break

11:00-13:00: Overview of the GEMPACK software

13:00-14:00: Lunch

14:00-15:30: Theory of the BMMX ICGE model

15:30-16:00: Coffee break

16:00-18:00: The Interregional Input-Output System for Mexico, 2013

Day 2 (January  23) - The BMMX ICGE model

9:00-10:30: Hands-on: the database for the BMMX ICGE model

10:30-11:00: Coffee break

11:00-13:00: Hands-on: the database for the BMMX ICGE model (cont.)

13:00-14:00: Lunch

14:00-15:30: Hands-on: application 1 (drought)

15:30-16:00: Coffee break

16:00-18:00: Hands-on: application 2 (KIBS)


Course Material

Students should install the software GEMPACK and bring it in their computers in the first day of the course. If preferable, please download and install a temporary (three-month-free-trial) executable-image version of GEMPACK and bring it in your computer.

Students should also read Text 1, Text 2 and Text 3 before before the first meeting. Other readings are provided below. It is also assumed that students are familiar with basic input-output analysis.


Go through the BMMX ICGE guide and answer the XX questions related to the BMMX ICGE model. Follow the instructions in Appendix 1 in order to install the model in your computer. You will need the following files:

  • Computing Guide for the BMMX ICGE Model Using Customized RunGEM - download
  • The Customized RunGEM - download
  • BMMX ICGE folder with model files - download

Examples IO

Excel (check also https://guilhotojjmgen.wordpress.com/)

Examples IO Mexico

Text and Data

Exercise 1 – Agriculture in Sinaloa

Exercise 2 – Exports and KIBS

Practice (Stylized Johansen Model)

Gempack documentation – pp 17-28 - download

Examples BMMX

Simulation 1 – Drought in Sinaloa

Simulation 2 – TFP growth in KIBS


Lecture 1 – Introduction to CGE models, Lecture 2 – GEMPACK, Lecture 3 – The BMMX ICGE model, Lecture 4 – Input-output models



Multipliers in an Island Economy: The Case of the Azores, Haddad, E. A., Silva, V., Porsse, A. A., and Dentinho, T. In:  A. Batabyal and P. Nijkamp (Eds.), The Region and Trade: New Analytical Directions, World Scientific, p. 205-226, 2015

Spatial Perspectives of Increasing Freeness of Trade in Lebanon, Haddad, E. A.. The Annals of Regional Science, v.53, n. 1, p. 23-54, 2014.

Domestic Tourism and Regional Inequality in Brazil, Haddad, E. A., Porsse, A. A., and Rabahy, W. A.. Tourism Economics, v. 19, p. 173-186, 2013.

Impact Assessment of Interregional Government Transfers: Lessons from the Brazil Experience, Haddad, E. A., Luque, C. A., Lima, G. T., Sakurai, S. N and Costa, S. M., In: J. R. Cuadrado-Roura and P. Aroca (Eds.), Regional Problems and Policies in Latin America, Advances in Spatial Science, Springer Verlag, p. 475-493, 2013

Climate Change and the Future of Regions, Azzoni, C. R. and Haddad, E. A.. In: R. Capello and T. P. Dentinho (Eds.). Networks, Space and Competitiveness: Evolving Challenges for Sustainable Growth. Edward Elgar Publishing, 2012.

Regional Integration in Colombia: A Spatial CGE Application, Haddad, E. A., Barufi, A. M. B., Costa, S. M.. Scienze Regionali / Italian Journal of Regional Science, v.10, p. 3-28, 2011.

Assessing the ex ante Economic Impacts of Transportation Infrastructure Policies in Brazil, Haddad, E. A.; Perobelli, F. S.; Domingues, E. P.; Aguiar, M.. Journal of Development Effectiveness, v. 3, no.1, p. 44-61, 2011.

Major Sport Events and Regional Development: The Case of the Rio de Janeiro 2016 Olympic Games, Haddad, E. A. e Haddad, P. R.. Regional Science Policy and Practice, v. 2, p. 79-95, 2010.

Regional Effects of Port Infrastructure: A Spatial CGE Application to Brazil, Haddad, E. A., Hewings, G. J. D., Perobelli, F. S. e dos Santos, R. A. C.. International Regional Science Review, v. 33, p. 239-263, 2010.

Spatial Aspects of Trade Liberalization in Colombia: A General Equilibrium Approach, Haddad, E. A., Bonet, J., Hewings, G.J.D. e Perobelli, F.S.. Papers in Regional Science, v. 88, p. 699-732, 2009.

Input-Output Analysis: Foundations and Extensions, Miller, R, and Blair P., 2nd Edition. Cambridge, UK: Cambridge University Press, 2009.

Interregional Computable General Equilibrium Models, Haddad, E. A.. In: Sonis, M.; Hewings, G. J. D. (Org.). Tool Kits in Regional Science: Theory, Models and Estimation, Berlin: Springer, p. 119-154, 2009.

Exploring Spatial Data with GeoDa: A Workbook, Anselin, L., Spatial Analysis Laboratory, Department of Geography, University of Illinois, Urbana-Champaign, Revised Version, March 6, 2005.

Notes and Problems in Applied General Equilibrium Economics, Dixon, P.B.,Parmenter, B.R., Powell, A. A. and Wilcoxen, P. J., Amsterdam, North-Holland, 1992.

Notes and Problems in Microeconomic Theory , Dixon, P.B.,Bowles,  S. and Kendrick, D., Amsterdam, North-Holland, 1980.


Previous Editons of “Programa Nereides”

1. Teresina, PI, Brazil (July 18-20, 2017) - Métodos de Análise Regional e Interregional

2. Rabat , Morocco (October 10-13, 2017) - Multi-regional Economic Modeling: Applications for Morocco

3. Casablanca, Morocco (April 23-26, 2018) – Regional Economics

4. Ponta Porã, MS, Brazil (June 13-14, 2018) - Métodos de Análise Regional e Interregional

5. Viña del Mar, Chile (December 3-5, 2018) - International Workshop: “General Equilibrium Modeling: Applications for the Chilean Economy”

6. Sorocaba, SP, Brazil (February 21, 2019) – Workshop sobre Economía Aplicada

7. Benguerir, Morocco (April 1-4, 2019) – Regional Economics

8. Huambo, Angola (June 4-5, 2019) - Workshop: “Modelos de Economia Regional Aplicados a Angola”

9. Cali, Colombia (July 22-23, 2019) -  “Datos Espaciales y Análisis Factorial: Competitividad Sistémica para la Región Pacífico de Colombia”


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