Jonathan Mark Horridge

Victoria University Melbourne | VU · Centre of Policy Studies

During a lively debate between Haroon Bhorat and Michael Sachs at the University of Pretoria recently, Bhorat pleaded for supply‐side measures to alleviate poverty in South Africa, rather than demand‐side measures. (The debate took place during a session at the Faculty of Economic and Management Sciences' Inaugural Research Day on 8 September, 2023...

Being highly dependent on the oil sector, Azerbaijan suffered from economic downturn due to sharp fall in oil prices in 2015. However, with oil price not expected to return to the 2012 level, daunting challenges remain. Simulated impact of economic reform priorities--using a computable general equilibrium (CGE) model (AzeORANI)--shows that, under t...

Since its EU accession, Poland has invested strongly in the development of fast road transport network. As a result, the total length of modern, high-speed roads has increased from around 500 km in 2005 to over 3000 km in 2015. Yet, while the positive impact of transport infrastructure investment on overall accessibility is unquestionable there are...

Spatial CGE models rely on detailed multiregional input-output (MRIO) tables. This paper compares two different approaches to compiling MRIO tables for Austria-an algorithm-based approach that regionalizes national input-output tables (IOT) and generates trade estimates using a predefined set of regional variables (i.e. Horridge's algorithm), and a...

We introduce SIMPLE-G, a Simplified International Model of agricultural Prices, Land use, and the Environment- Gridded version, which is a novel tool for evaluating sustainability policies in a global context while factoring in local heterogeneity in land and water resources and natural ecosystem services. This multi-scale model can provide boundar...

Recent internal migration flows in Brazil differ from historical patterns observed since the seventies. In the past, internal migration typically flowed from states in Northeast Brazil and Minas Gerais toward the richer Southeast states of São Paulo and Rio de Janeiro. Since the eighties, a succession of economic crises and expansion of the agricul...

We analyze the impacts of partially closing the livestock yield gap in Brazil, with a focus on a reduction in deforestation and emissions, using a computable general equilibrium model of Brazil, the TERM-BR model, tailored for land use and emissions analyses. We use satellite imagery information generated by LAPIG (Images Processing and Geoprocessi...

We develop and link the Integrated Economic-Environmental Modeling (IEEM) Platform to ecosystem services modeling (ESM). The IEEM+ESM Platform is an innovative decision-making framework for exploring complex public policy goals and elucidating synergies and trade-offs between alternative policy portfolios. The IEEM+ESM approach is powerful in its a...

The South African National Treasury expected a revenue shortfall of R48.2 billion in 2017/18 and proposed tax policy measures to raise an additional R36 billion in 2018/19. A key component to raise the additional revenue was a 1% point increase in the VAT rate to 15% effective from 1 April 2018. The increase in the VAT rate was not welcomed as it w...

In 2014, the United Nations published the first International Standard for environmental-economic statistics, known as the System of Environmental-Economic Accounting (SEEA). As more countries adopt and implement the SEEA, the availability of consistent environmental and economic information increases the need for analytical tools that can use this...

This paper examines the long-run regional economic effects within South Africa of changing the electricity-generation mix towards less coal. To do so, a regional Computable General Equilibrium (CGE) model of South Africa is employed for the analysis. The overall result stemmed from all scenarios suggest that the effect of a transition to an energy...

The original version of this article was inadvertently published with incorrect figures. The correct figures are replaced in the chapter.

This paper develops and operationalizes the integrated economic-environmental modelling (IEEM) platform which integrates environmental data organized under the first international system of environmental economic accounting with a powerful dynamic economy-wide modelling approach. IEEM enables the ex-ante economic analysis of policies on the economy...

Regional expansion of irrigated agriculture may minimize risks for the farmer and strengthen food security for future generations. However, at the same time, it has a damaging effect on water availability and may worsen episodes of micro regional water scarcity. In this paper, we analyze scenarios of irrigation expansion in the Brazilian agricultur...

Indonesia has introduced a moratorium on the conversion of natural forests to land used for palm oil production. Using a dynamic, bottom-up, interregional computable general equilibrium model of the Indonesian economy, we assess several scenarios of the moratorium and discuss its impacts on the domestic economy as well as on regional economies with...

This paper applies regional dynamic CGE models in order to simulate growth of regional per capita income within the Visegrad group countries. Our main goal is to show how regional income differentials would evolve within the Czech Republic, Hungary, Poland and Slovakia if they did not join the European Union. We find that all regions of the Visegra...

The Sustainable Development Goals (SDGs) are a universal call to action to end poverty and protect the environment. The Government of Guatemala is prioritizing the SDGs it will focus on and defining lines of action to make progress towards achieving them. In this paper, we apply the Integrated Economic-Environmental Modelling platform for Guatemala...

Jednym z celów niniejszej książki jest przybliżenie polskiemu czytelnikowi szczegółów metodologicznych budowy regionalnych modeli równowagi ogólnej na przykładzie polskiej wersji modelu CGE o nazwie TERM (The Enormous Regional Model) obejmującego 16 województw. Regionalne modele równowagi ogólnej (CGE) są obecnie grupą modeli najczęściej wykorzysty...

The TERM implementation of a multi-regional model enables users to run with more sectors and regions than earlier multi-regional CGE models. But a trait of multi-regional modeling is that there is always interest in regions smaller than those captured by the model. In addition, in policy debates, political regions are of interest. A top-down repres...

This chapter presents the Integrated Economic-Environmental Modelling (IEEM) platform. IEEM advances the state of the art in decision making frameworks, enabling policy makers to understand the full range of economic and environmental implications of public policy and investment alternatives. IEEM utilizes data organized under the first internation...

The purpose of the presentation is to demonstrate how integrated economic-environmental modeling and the Integrated Economic-Environmental Modeling Platform (IEEM) contribute to evidence-based policy making. The desired outcome is to inspire countries to develop their environmental accounting systems under the UN System of Environmental Economic Ac...

In effect since January of 2016, the seventeen Sustainable Development Goals are a universal call to action to end poverty and protect the environment. The Government of Guatemala is currently engaged in a prioritization exercise, defining specific lines of action and developing estimates of costs of implementation. In this Chapter we apply the Int...

The concurrence of major increases in ethanol production and world commodity price increases were captured by the ‘food-versus-fuel’ dilemma around 2008. Brazil is the largest producer of ethanol worldwide and still has vast tracts of natural land available. This paper uses Brazil as case study to simulate food security and environmental impacts, e...

This paper develops and operationalizes the Integrated Economic-Environmental Modelling (IEEM) platform which integrates environmental data organized under the first international standard for environmental-economic accounting with a powerful economy-wide modelling approach. IEEM enables the ex-ante economic analysis of public policies and investme...

This paper develops and operationalizes the Integrated Economic-Environmental Modelling (IEEM) platform which integrates environmental data organized under the first international standard for environmental-economic accounting with a powerful economy-wide modelling approach. IEEM enables the ex-ante economic analysis of public policies and investme...

Economy-wide models such as computable general equilibrium (CGE) models are powerful tools that provide insights on policy impacts on standard economic indicators. With the recent publication of the System of Environmental-Economic Accounting (SEEA), the power of this approach is amplified. This article addresses an important gap in economy-wide po...

Computable General Equilibrium (CGE) Models are powerful tools that provide insights on policy impacts on standard economic indicators. With the recent publication of the first international standard for environmental-economic accounting, the System of Environmental-Economic Accounting Central Framework (SEEA CF; UN et al., 2014), the analytical st...

This paper examined how regional expansion of irrigated agriculture affects the water demand in Brazil and used an interregional , bottom-up, dynamic model of general equilibrium calibrated for 2005 with projections for 2025. For the first time, a module able to integrate water use data prepared at the product level and calculated activity in milli...

Using a CGE model based on the ORANI-G model and introducing a new production nest that contains two new factors combined together through a Leontief Production function, this paper examines the expected impacts that expanding the Jatropha Curcas plantations will have on the Egyptian economy. We used an input-output table, derived from GTAP databas...

Brazil has dramatically increased its agricultural area under cultivation, in the process becoming a major food exporter at the cost of natural forests. A new challenge is to meet the food demands of an expanding world population in the face of pessimistic climate change scenarios and the increasing scarcity of land. Can Brazil help meet rising wor...

South Africa, as an upper middle-income, resource-intensive developing country with an open economy, has to find innovative ways to combat poverty, promote economic growth and reduce the intensity of resource use, simultaneously. One option is to explore the plausibility of achieving a double dividend by levying a tax on water and energy and recycl...

For the last 10 years, Indonesian economy suffers from a triple setback. First, it experiences a slowing-down in economic growth. Second, the rate of poverty reduction is also slowed down, and third, there has been no improvement in the inter-regional economic disparity. In 2011, Indonesian government set a new strategy by launching a master plan f...

We describe the progress of computable general equilibrium (CGE) modeling software since the 1980s and contrast the main systems used today: GAMS, MPSGE and GEMPACK. The development of these general-purpose modeling systems has underpinned rapid growth in the use of CGE models, and allowed models to be shared and their results replicated. We show h...

On accession to the EU, Poland, one of the most agricultural countries in Europe, became eligible for the Common Agricultural Policy (CAP), which it perceived as a chance to develop its rural economy. However, in constructing its Rural Development Programme 2007−2013, Poland directed the largest funding share to Less Favoured Areas (LFA) − a contro...

The purpose of this chapter is to show how double dividends could be obtained from using market instruments to tax water use in a developing country. The double dividends are namely environmental (water conservation) on the one hand, and poverty reduction dividends on the other. We apply a water tax on selected industries in South Africa to reduce...

This paper describes the structure of PHILGEM, a single country computable general equilibrium (CGE) model of the Philippine economy. PHILGEM offers a good starting point for model development, especially for researchers who may want to extend their ORANI-G models to draw on supplementary data coming from a social accounting matrix (SAM). A generic...

Agriculture area and production has expanded greatly in Brazil during the last 40 years. The area of annual crops almost doubled, while the area planted for pastures and forestry tripled. However, the rate of deforestation has considerably reduced since 2004. In this paper we analyze the effect of slower forest clearing on food supply and the econo...

Agriculture area and production has expanded greatly in Brazil during the last 40 years. The area of annual crops almost doubled, while the area planted for pastures and forestry tripled. However, the rate of deforestation has considerably reduced since 2004. In this paper we analyze the effect of slower forest clearing on food supply and the econo...

This paper describes the structure of PHILGEM, a single country computable general equilibrium (CGE) model of the Philippine economy. PHILGEM offers a good starting point for model development, especially for researchers who may want to extend their ORANI-G models to draw on supplementary data coming from a social accounting matrix (SAM). A generic...

In this paper we analyze the Indirect Land Use Change (ILUC) effects of ethanol production expansion in Brazil through the use of an inter-regional, bottom-up, dynamic general equilibrium model calibrated with the 2005 Brazilian I-O table. A new methodology to deal with ILUC effects is developed, using a transition matrix of land uses calibrated wi...

TERM (The Enormous Regional Model) provides a strategy for creating a "bottom-up" multi-regional CGE model which treats each region of a single country as a separate economy. This makes it a useful tool for examining the regional impacts of shocks that may be region-specific. TERM is designed to allow quick simulations with many regions, so allowin...

We show how you can carry out systematic sensitivity analysis (SSA) with respect to parameters and/or shocks, which vary according to a specified covariance matrix. You can use the existing SSA tools in RunGTAP or RunGEM to do this if your model is implemented in GEMPACK. Those SSA tools assume that all parameters or shocks are varying independentl...

We describe the progress of computable general equilibrium (CGE) modeling software since the 1980s and contrast the main systems used today: GAMS, MPSGE, and GEMPACK. The development of these general-purpose modeling systems has underpinned rapid growth in the use of CGE models and allowed models to be shared and their results replicated. We show h...

The Common Agricultural Policy (CAP) is one of the most complex and also the most costly of all EU policies. It comprises over 40 financing streams, including Pillar I and Pillar II measures which are highly regulated. In the case of Poland, these are directed to all 16 NUTS2 regions. We are modelling here the regional and thus national consequence...

In this paper we analyze the Indirect Land Use Change (ILUC) effects of ethanol production expansion in Brazil through the use of an inter-regional, bottom-up, dynamic general equilibrium model calibrated with the 2005 Brazilian I-O table. A new methodology to deal with ILUC effects is developed, using a transition matrix of land uses calibrated wi...

In this paper we analyze the Indirect Land Use Change (ILUC) effects of ethanol production expansion in Brazil through the use of an inter-regional, bottom-up, dynamic general equilibrium model calibrated with the 2005 Brazilian I-O table. A new methodology to deal with ILUC effects is developed, using a transition matrix of land uses calibrated wi...

The number of regions and sectors in most regional CGE models is small, due to data and computing limitations. The uses of such models will broaden if they have larger CGE databases. The TERM model combines a massive database with a variable aggregation facility and techniques to economize on computing capacity. This paper goes further, by outlinin...

Computable General Equilibrium (CGE) models are now routinely utilized for the evaluation of trade policy reforms, yet they are typically quite highly aggregated, which limits their usefulness to trade negotiators who are often interested in impacts at the tariff line. On the other hand, Partial Equilibrium (PE) models, which are typically used for...

MMRF is a dynamic CGE model of Australia's six State and two Territory economies. MMRF is used extensively in contract research. Several features of MMRF make it an ideal tool for policy analysis, including: dynamics, a highly disaggregated regional and sectoral database, a national labour market, and detailed modelling of government financial stat...

CGE models are utilized for the evaluation of trade policy reforms, yet they are typically highly aggregated, limiting their usefulness to trade negotiators interested in impacts at the tariff line. Partial Equilibrium (PE) models used for disaggregate analysis lack the benefits of an economy-wide analysis required to examine the overall impact of...

In response to oil price rises and carbon emission concerns, policies promoting increased ethanol usage in gasoline blends are considered by many countries, including major energy users such as USA, EU and Japan. As a result, Brazil, as the largest sugar ethanol producer and exporter in the world, can expect growing foreign demand for ethanol expor...

Purpose The purpose of this paper is to outline a version of SinoTERM, a multi‐regional computable general equilibrium (CGE) model of China that has been updated and disaggregated further to enhance the agricultural detail. A version of the model is publicly available and will be useful to CGE modelers studying Chinese agricultural issues ( www.mon...

This paper describes a global model for agriculture and bioenergy (GLOMAB) that incorporates biomass, biofuels and bioelectricity sectors into the GTAP-Energy model by expanding the global GTAP database, production and consumption structures. Biofuels are separated between first- generation (sugar ethanol, starch ethanol) and second- generation (ce...

This paper complements the findings of Atal, Ñopo and Winder (2009) on gender and ethnic wage gaps for 18 Latin American countries circa 2005 by analyzing gender wage gaps for the same countries between circa 1992 and circa 2007. During this span the overall gender earnings gaps dropped about 7 percentage points, while the unexplained component dro...

The paper outlines the theory and database preparation of SinoTERM, a "bottom-up" computable general equilibrium model of the Chinese economy. The methodology by which we construct the multi-regional model allows us to present the economy of China in an unprecedented amount of detail. SinoTERM covers all 31 provinces and municipalities. The databas...

Large-scale multi-regional CGE models of Australia, such as MMRF and TERM, underlie most CoPS consulting work. The regional detail, modelled in bottom-up fashion, greatly interests policy makers and is often needed to answer questions like: how would less rainfall in southern Australia affect the economy? To support this work, we have devised a var...

A static computable general equilibrium model of South Africa is adapted to compare new taxes on water demand by two industries, namely forestry, and irrigated field crops. Comparisons are made with respect to both the short and the long run, in terms of three target variables, namely (i) the environment; (ii) the economy; and (iii) equity. Since t...

Large-scale multi-regional CGE models of Australia, such as MMRF and TERM, underlie most CoPS consulting work. The regional detail, modelled in bottom-up fashion, greatly interests policy makers and is often needed to answer questions like: how would less rainfall in southern Australia affect the economy? To support this work, we have devised a var...

In this paper we address the issue of how trade integration can affect poverty and income distribution in Brazil. The analysis is conducted through a static General Equilibrium and Microsimulation Model of Brazil, calibrated with the PNAD 2001 data. The model comprises 112,055 Brazilian households and 263,938 adults, distinguishing 42 activities, 5...

The sharp increase in Australia's terms of trade since 2003-04 has dramatic regional and sectoral implications. Mining-intensive regions have gained from the jump in export prices. Import-competing sectors have faced greater competition both from falling import prices and due to rising demand for domestic factors from the mining sectors. The drough...

The paper outlines the theory and database preparation of SinoTERM, a "bottom-up" computable general equilibrium model of the Chinese economy. The methodology by which we construct the multi-regional model allows us to present the economy of China in an unprecedented amount of detail. SinoTERM covers all 31 provinces and municipalities. The databas...

Gains and losses from trade liberalization are often unevenly distributed inside a country. For example, if budget shares vary according to household income, changes in commodity prices will redistribute an overall welfare change between household types. Household incomes will also be differentially affected. Sectoral differences in factor-intensit...

In response to oil price rises and carbon emission concerns, policies promoting increased ethanol usage in gasoline blends are being implemented by many countries, including major energy users such as USA, EU and Japan. As a result, Brazil, as the largest ethanol producer and exporter in the world, can expect growing foreign demand for ethanol expo...

In response to oil price rises and carbon emission concerns, policies promoting increased ethanol usage in gasoline blends are being implemented by many countries, including major energy users such as USA, EU and Japan. As a result, Brazil, as the largest sugar ethanol producer and exporter in the world, can expect growing foreign demand for ethano...

South Africa, as an upper middle-income, resource-intensive developing country with an open economy, has to find innovative ways to combat poverty, promote economic growth and reduce the intensity of resource use, simultaneously. One option is to explore the plausibility of achieving a double dividend by levying a tax on water and energy and recycl...

Indonesia’s national and regional/local policy makers are becoming increasingly concerned with disparities between regions. Aggregate incomes and expenditures in one region may change proportionally more than national changes. This paper contains a technical summary of the structure and special features of INDOTERM model, a member of the TERM famil...

A CGE model of South Africa is used to find the potential for a double or triple dividend if the revenues raised from an energy-related environmental tax are recycled to households and industry through lowering existing taxes. Four environmental taxes and three revenue-recycling schemes are compared. The environmental taxes are (i) a tax on greenho...

Many modern Windows PCs now have two or more processors. These PCs cost little more than a PC with a single processor. If you are solving a model accurately using GEMPACK, you will usually extrapolate from 2 or 3 multi-step calculations (for example, from Gragg 2-step, 4-step and 6-step calculations). The separate multi-step calculations are indepe...

In this paper we extend previous results about how trade integration can affect poverty and income distribution in Brazil. To assess the impacts of a Doha Development Agenda (DDA) scenario on poverty and income distribution in Brazil, a 2 computable general equilibrium model (CGE) of Brazil was used, linked to a microsimulation (MS) model. This met...

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This paper addresses the potential effects of the Doha round of trade negotiations on poverty and income distribution in Brazil, using an applied general equilibrium (AGE) and micro-simulation model of Brazil tailored for income distribution and poverty analysis. Of particular importance is the fact that the representative household hypothesis is r...

TERM (The Enormous Regional Model) is a “bottom-up” CGE model of Australia which treats each region as a separate economy. TERM was created specifically to deal with highly disaggregated regional data while providing a quick solution to simulations. This makes it a useful tool for examining the regional impacts of shocks that may be region-specific...

A CGE model of South Africa is used to find the potential for a 'double or triple dividend', if the revenues raised from an energy related environmental tax are recycled into households and industry through lowering existing taxes. Four environmental taxes and three revenue-recycling schemes are compared. The environmental taxes are (i) a tax on gr...

MPSGE is a non-algebraic language for the formulation of applied general equilibrium models. When you build a model using MPSGE you do not need to specify equations, but you instead work with a tabular representation of the model. The input tables make reference to source statistics, typically drawn from a single benchmark year. MPSGE input data de...

To make CGE models realistic, inequality constraints (e.g., import quotas) or non-differentiable functions (e.g., income tax schedules) are sometimes needed. Both situations may be described using complementarity conditions, which state that either an equation is true or its complementary variable is at a boundary value. The paper describes a pract...

Gains and losses from trade liberalization are often unevenly distributed inside a country. For example, if budget shares vary according to household income, changes in commodity prices will redistribute an overall welfare change between household types. Household incomes will also be differentially affected. Sectoral differences in factor-intensit...

To make CGE models realistic, inequality constraints (e.g., import quotas) or non-differentiable functions (e.g., income tax schedules) are sometimes needed. Both situations may be described using complementarity conditions, which state that either an equation is true or its complementary variable is at a boundary value. The paper describes a pract...