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6 - Factors of Production in a CGE Model

Published online by Cambridge University Press:  11 December 2020

Mary E. Burfisher
Mary E. Burfisher
Affiliation:
Purdue University, Indiana
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Summary

In this chapter, we explore factor markets in a computable general equilibrium (CGE) model. Data in the Social Accounting Matrix (SAM) on factors of production describe factors’ sources of employment and income. Important factor market concepts in the CGE model are factor mobility assumptions, the effects of factor endowment and productivity growth, complementary and substitute factors, full-employment versus unemployment model closures, and the links between changes in factor supply and industry structure and between changes in industry structure and factor prices.

Keywords

complementary factorssubstitute factorsfactor endowmentfactor productivityeffective factor endowmenteffective factor returnfactor mobilityfactor transformation functionunemploymentwagerentfactor intensity
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Chapter
Information
Introduction to Computable General Equilibrium Models , pp. 174 - 193
Publisher: Cambridge University Press
Print publication year: 2021

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