Economic Equilibrium Modeling with GAMS

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---- VAR MYB . 0.040 +INF .
---- VAR PXA . 2.076 +INF .
---- VAR PYA . 1.126 +INF .
---- VAR PXB . 1.887 +INF .
---- VAR PYB . 1.239 +INF .
---- VAR A . 1.320 +INF .
---- VAR B . 1.762 +INF .
---- VAR WA . 0.904 +INF .
---- VAR WB . 1.009 +INF .
Compute free trade equilibrium and report equivalent variations in income:
* Counterfactual model: Free Trade (remove tariffs)
T_A = 0;
T_B = 0;
$INCLUDE TARIFFS.GEN
SOLVE TARIFFS USING MCP;
EV_A = 100 * (WA.L - WA0)/WA0;
EV_B = 100 * (WB.L - WB0)/WB0;
DISPLAY EV_A, EV_B;
Free trade calculations with equivalent variation report:
LOWER LEVEL UPPER MARGINAL
---- VAR MXA . 0.032 +INF .
---- VAR MXB . . +INF 2.220E-16
---- VAR MYA . . +INF EPS
---- VAR MYB . 0.057 +INF .
---- VAR PXA . 1.928 +INF .
---- VAR PYA . 1.077 +INF .
---- VAR PXB . 1.928 +INF .
---- VAR PYB . 1.077 +INF .
---- VAR A . 1.247 +INF .
---- VAR B . 1.758 +INF .
---- VAR WA . 0.902 +INF .
---- VAR WB . 1.011 +INF .
---- 1030 PARAMETER EV_A = -9.657 HICKSIAN EQUIVALENT
VARIATION FOR AGENT A
PARAMETER EV_B = 1.242 HICKSIAN EQUIVALENT
VARIATION FOR AGENT B