@article{Vellinga:158857,
      recid = {158857},
      author = {Vellinga, Nico and Xu, Yan and Roberts, Deborah},
      title = {Understanding the economy-wide impacts of CAP decoupling:  An assessment of alternative CGE model specifications},
      address = {2013},
      number = {355-2016-18211},
      pages = {23},
      year = {2013},
      abstract = {The paper analyses the consequences of decoupling farm  support for Scottish agriculture and the wider Scottish  economy. The analysis is carried out using three types of  dynamic computable general equilibrium models: A recursive  dynamic model and two forward-looking CGE models, one  assuming physical capital is sector-specific, the other  assuming such capital is mobile between sectors. The  essential difference between the recursive dynamic and  forward-looking models is the way in which farm households  are assumed to responds to shocks. In particular, in the  recursive dynamic case households only respond to past  behaviour while with the forward-looking model the  households equate returns across the various assets they  own. Decoupling is simulated by introducing a production  subsidy to land. The results illustrate that the difference  between the backward-looking and the two forward-looking  models lies in the response of households in the first  number of years after the shock and that this can lead to  different outcomes in the long-run between the three model  types. Systematic sensitivity analysis suggests that the  results of the backward-looking model are more uncertain,  especially in later years, compared to the two  forward-looking models. Future research should be aimed at  improving the calibration of the models.},
      url = {http://ageconsearch.umn.edu/record/158857},
      doi = {https://doi.org/10.22004/ag.econ.158857},
}