ABSTRACT
Computable general equilibrium (CGE) models are extensively used in agricultural economics and macroeconomic studies to assess the impacts of policy and programs. By providing a theoretically consistent mathematical representation of an economic system, these models effectively capture the linkages among sectors of the economy. This chapter provides an overview of CGE modelling in forest economics. As an illustration, a dynamic recursive CGE model is presented and applied to assess the regional economic impacts of Brazil’s forest concessions policy in the Amazon. A comprehensive discussion on innovations in CGE analysis concludes the chapter. These innovations include institutional advancements, model validation techniques, systematic sensitivity analysis to address parameter uncertainty, and integration of ecosystem services.
