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Abstract

This paper illustrates how a simple labor-leisure choice is incorporated into the U.S. International Trade Commission’s CGE model of the U.S. economy. Following the work of Ballard (1999), special attention is paid to the parameterization of the labor-leisure choice so that the relative responsiveness of the model is consistent with econometrically observed behavior. The model is extended using a simple top CES nest between leisure and the consumption good composite.

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