@article{Siddig:332281,
      recid = {332281},
      author = {Siddig, Khalid and Grethe, Harald},
      title = {International Price Transmission in CGE Models: How to  Reconcile Econometric Evidence and Endogenous Model  Response?},
      address = {2012},
      pages = {29},
      year = {2012},
      note = {Presented at the 15th Annual Conference on Global Economic  Analysis, Geneva, Switzerland},
      abstract = {The importance of empirically analyzing the transmission  to and impacts of international prices on domestic markets  is growing, particularly since the 2006 – 2008 food price  hike. However, the field is dominated by econometric  time‐series analysis (PTA) and rather disconnected from  analyses based on simulation models such as computable  general equilibrium (CGE) models. The missing  reconciliation among these tools could be due to: PTA often  being concerned with high frequency data and short term  adjustment processes, which does not reconcile well with  the annual data of CGE analyses; typically little overlap  between research teams in econometric time series analysis  and those in CGE modeling; and the endogeneity of price  transmission in CGE models. Due to this endogeneity, the  calibration of CGE models to empirically observed price  transmission is not straightforward, as an infinite  combination of model parameters and specifications allows  for reaching a certain level of price transmission. This  paper aims to address the question of how a certain degree  of price transmission from the international to the  domestic market, which may be determined empirically such  as based on a vector error correction model, can be met in  a single country CGE model. We examine and validate seven  hypothetical determinants including structural  characteristics of the model, the parameterization of  behavioral functions, and properties of the sectors  concerned. The findings of this paper support controlling  the pass‐through of prices from the international to the  domestic market in CGE models.},
      url = {http://ageconsearch.umn.edu/record/332281},
}