Class meeting
Dates: August 10 – December 09, 2021
Time: Tuesday and Thursday, 8h00 to 9h50
Time zone: GMT-3:00 (Brasília)
Instructor: Eduardo A. Haddad
Prof. 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.
Prof. 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.
Prof. 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 January-December 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 is now the Elect-President of the Regional Science Association International (RSAI). 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. In 2017-2018, he was the Chairman of the Department of Economics at USP.
Teaching assistant: Inácio F. Araújo
Dr. 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 regional analysis. He has experience in the implementation and application of economic models, especially input-output and computable general equilibrium models.
Teaching assistant: Ademir A. M. Rocha
Ademir Rocha is a Ph.D. Candidate at the Department of Economics and researcher at the Regional and Urban Economics Lab (NEREUS) and Interdisciplinary Climate Investigation Center (INCLINE) at the University of São Paulo, Brazil. He has experience in the field of economic modeling and has published articles on the following topics: regional and urban economics, locational decision of economic agents, land use modeling and economics of climate change.
Learning objectives
The course goals are:
Readings
Textbooks:
Dervis, K., De Melo, J. and Robinson, S. (1982). General Equilibrium Models for Development Policy. Cambridge University Press.
Dixon, P. D., Jerie, M. and Rimmer, M. T. (2018). Trade Theory in Computsble General Equilibrium Models: Armington, Krugman and Melitz. Springer.
Dixon, P. B. and Jorgenson, D. W. (2013). Handbook of Computable General Equilibrium Modeling. Volumes 1A and 1B. North-Holland, Amsterdam.
Dixon, P. B., Parmenter, B. R., Sutton, J. and Vincent, D. P. (1982). ORANI: A Multisectoral Model of the Australian Economy. North-Holland, Amsterdam.
Dixon, P. B., Parmenter, B. R., Powell, A. A. and Wilcoxen, P. J. (1992). Notes and Problems in Applied General Equilibrium Economics. Advanced Textbooks in Economics 32, Eds. C. J. Bliss and M. D. Intriligator, North-Holland, Amsterdam.
Dixon, P. D. and Rimmer, M. T. (2002). Dynamic General Equilibrium Modelling for Forecasting and Policy: A Practical Guide and Documentation of MONASH. Amsterdam, North-Holland.
Ginsburgh V. and Keyzer M. (1997). The Structure of Applied General Equilibrium Models. The MIT Press, Cambridge.
Haddad, E. A. (1999). Regional Inequality and Structural Changes: Lessons from the Brazilian Economy. Ashgate, Aldershot.
Hertel, T. W. (1997). Global Trade Analysis: Modeling and Applications, Cambridge University Press.
Isard, W. et al. (1998). Methods of Interregional and Regional Analysis. Ashgate, Aldershot.
Miller, R.E. and Blair, P.D. (2009). Input-Output Analysis: Foundations and Extensions. Englewood Cliffs: Prentice-Hall.
Shoven, J. B. and Whalley, J. (1992). Applying General Equilibrium. Cambridge Surveys of Economic Literature. Cambridge University Press, Cambridge.
Complementary readings:
To be indicated by the instructor. A list of complementary readings will be available at the website of the course.
Link for class material distant access
Moodle: https://edisciplinas.usp.br/acessar/
NEREUS: http://www.usp.br/nereus/
Toolboxes of Input-Output Analysis
Análise de Insumo-Produto: Teoria e Aplicações no R (NEDUR-UFPR) – Link
ioanalysis: Input-Output Analysis in R (REAL-UIUC) – Link
PyIO: Python Module for Input-Output Analysis (REAL-UIUC) – Link
REAL I-O: Input-Output Operation Software (REAL-UIUC) – Link
Examination and grading
The final mark composition:
Homework and attendance
Some of the techniques used will be included in homework assignments, which should be delivered on previously established dates. While student cooperation is encouraged to resolve exercises, each student will have to submit his/her own answers. There will be quizzes throughout the course that will be part of the grading.
Late assignments
Regular attendance is expected as well as delivery of homework (quizzes, group exercises, presentations and simulation exercises). In addition, there will be an individual project at the end of each part of the course. The Final Exam will consist of a paper based on an application of an inter-regional input-output model (Part I), and an inter-regional CGE model (Part II).
Class attendance
This year’s course will be online, using the Zoom Platform. This makes possible to open the course for a broader audience in Brazil and in the Lusophone world. Students with working knowledge of Portuguese are welcome to register. The course will be conducted in Portuguese. Applicants therefore must be proficient or have a sound understanding of the Portuguese language in order to understand, communicate, and participate actively in the course activities. Despite lectures being taught in Portuguese, the bibliography will be mainly in English.
Complementary activities
We may schedule eventual tutorial meetings, outside regular course hours, to discuss and carry-on hands-on applications of the concepts and techniques discussed in the sessions. Such activities may be complemented by the introduction of extensions of the basic models.
Course project
In previous editions of the course, we have developed with students applied models for different countries: Greece (2017), Chile (2018), and Colombia (2019). The development of such models has relied on collaboration with scholars and institutions from those countries (e.g. Prof. Yannis Psycharis at Panteion University, the team led by Patricio Aroca at UAI, and Dr. Jaime Bonet and his research team at Banco de la República). In essence, they have helped us with the country’s data and we have developed the models. At the end of the course, students engaged in collaborative research projects using one of the models developed during the semester. Many of the projects the students worked on then became the basis for publications.
Given the unique nature of this year’s course, the focus will be on Brazil. We will update the interstate IO table for Brazil, using 2015 data, and calibrate not only a national CGE model but also an inter-regional CGE model using the IO system. Students will engage on research projects supervised by professors with large experience in multisectoral and multirregional modeling. The best projects will become chapters of a volume on “The Brazilian Economy and its Regional Structural Challenges”, edited by Eduardo A. Haddad, Fernando S. Perobelli, and Inácio F. Araújo, and intended to be published electronically together with free access to all databases and models’ codes needed for replication of the exercises.
Course detailed outline
Part I: EAE6061 – Applied General Equilibrium Models I
Class #1 (August 10, 2021)
Topic: “General Equilibrium: Pure Theory, Applied Theory, and Practice”
Key learning outcome:
Manual chapters and readings:
Review (linear algebra) – Miller and Blair (2009), appendix
Class #2 (August 12, 2021)
Topic: “Economic Base Models I”
Key learning outcome:
Manual chapters and readings:
Article: “O PIB e a Renda” (Paulo R. Haddad) – O Tempo, 17/10/2019
Class #3 (August 17, 2021)
Topic: “Economic Base Models II”
Key learning outcome:
Manual chapters and readings:
Activity 2: Questions Angola Brazil
Solution: Brazil
Class #4 (August 19, 2021)
Topic: “Theoretical Structure of Input-Output Models”
Key learning outcome:
Manual chapters and readings:
Example IO: Excel (ver https://guilhotojjmgen.wordpress.com/)
Activity 3: Data Brazil_1a Data_Angola
Class #5 (August 24, 2021)
Topic: “Impact Analysis and Multipliers”
Key learning outcome:
Manual chapters and readings:
Activity 4: Data_Brazil_2a Data_Angola
Solution: Activity 5: Challenge (Man-year equivalent)
Class #6 (August 26, 2021)
Topic: “Regional and Inter-regional Input-Output Models”
Key learning outcome:
Manual chapters and readings:
Solution: Activity 6 (Key sectors)
Class #7 (August 31, 2021)
Topic: “Applications of Input-Output Models I”
Key learning outcome:
Manual chapters and readings:
Solution: Activity 7 (Decomposition of regional output)
Class #8 (September 02, 2021)
Topic: “Applications of Input-Output Models II”
Key learning outcome:
Manual chapters and readings:
Example (SAMIR – Marrocos): Excel file
Activity 8: Data_Brasil Data_Angola
Solution: Activity 8
Class #9 (September 09, 2021)
Topic: “Applications of Input-Output Models III” (Prof. Fernando Perobelli)
Key learning outcome:
Manual chapters and readings:
Example (SDA): Excel file
Activity 9 (SDA – Employment): Data
Solution: Activity 9
Class #10 (September 14, 2021)
Topic: “Global Input-Output Models” (Prof. Inácio Araújo)
Key learning outcome:
Manual chapters and readings:
Class #11 (September 16, 2021)
Topic: “Methods of Regionalization / Miyazawa”
Key learning outcome:
Manual chapters and readings:
Example (IIOAS Method): Excel file
Class #12 (September 21, 2021)
Topic: “Applications of Input-Output Models with R” (Prof. Vinicius Vale)
Key learning outcome:
Manual chapters and readings:
Database and RScript: see here
Class #13 (September 23, 2023)
Topic: “Social Accounting Matrix”
Key learning outcome:
Manual chapters and readings:
Example (SAM for Brazil): Data
Exercise: SAM of a Closed Economy
Class #14 (September 28, 2021)
Topic: “The Johansen Approach”
Key learning outcome:
Manual chapters and readings:
Class #15 (September 30, 2021)
Topic: “Introduction to GEMPACK”
Key learning outcome:
Manual chapters and readings:
Class #16 (October 05, 2021)
Topic: “Course Projects”
Key learning outcome:
Manual chapters and readings:
Part II: EAE6061 – Applied General Equilibrium Models II
Topic: “The ORANI Model I”
Key learning outcome:
Manual chapters and readings:
ORANI-G (Brazil): Files
Example (ORANI for Brazil): Data
Activity 1: Data
Class #2 (October 19, 2021)
Topic: “The ORANI Model II”
Key learning outcome:
Manual chapters and readings:
Activity 2: Questions
Class #3 (October 21, 2021)
Topic: “The ORANI Model III”
Key learning outcome:
Manual chapters and readings:
Activity 3: Questions
Class #4 (October 26, 2021)
Topic: “The ORANI Model IV”
Key learning outcome:
Manual chapters and readings:
Exercises: (i) Homogeneity test (ii) Reduction in real wages
Class #5 (October 28, 2021)
Topic: “The Miniature MONASH Model I”
Key learning outcome:
Manual chapters and readings:
Class #6 (November 04, 2021)
Topic: “The Miniature MONASH Model II”
Key learning outcome:
Manual chapters and readings:
Exercise (database): Questions
MM Model: Files
Wage Cut Simulation: Guide
Activity 4: Questions
Class #7 (November 09, 2021)
Topic: “The EFES Model”
Key learning outcome:
Manual chapters and readings:
Class #8 (November 11, 2021)
Topic: “Spatial CGE Models I”
Key learning outcome:
Manual chapters and readings:
Class #9 (November 16, 2021)
Topic: “Spatial CGE Models II”
Key learning outcome:
Manual chapters and readings:
Class #10 (November 18, 2021)
Topic: “The B-MARIA Model I”
Key learning outcome:
Manual chapters and readings:
Class #11 (November 23, 2021)
Topic: “The B-MARIA Model II”
Key learning outcome:
Manual chapters and readings:
Examples BMMX
BMMX ICGE Model: files
Class #12 (November 25, 2021)
Topic: “The B-MARIA Model III”
Key learning outcome:
Manual chapters and readings:
Data for calibration exercise: Files
Class #13 (November 30, 2021)
Topic: “The GTAP Model I” (TBC)
Key learning outcome:
Manual chapters and readings:
Class #14 (December 02, 2021)
Topic: “The B-MARIA Model IV”
Key learning outcome:
Manual chapters and readings:
Class #15 (December 07, 2021)
Topic: “The GTAP Model II” (TBC)
Key learning outcome:
Manual chapters and readings:
BMAPSP ICGE Model: files
Class #16 (December 09, 2021)
Topic: “Course Projects”
Key learning outcome:
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