Factor Markets in General Computable Equilibrium Models

One objective of Computable general equilibrium (CGE) models is the analysis of economywide<br/>effects of policy measures. The focus of the Factor Markets project is to analyse the<br/>functioning of factor markets for agriculture in the EU-27, including the Candidate<br/>Countries. While agricultural and food markets are fully integrated in a European single<br/>market, subject to an EU-wide common policy, the Common Agricultural Policy (CAP), this is<br/>not the case for the agricultural factor markets capital, labour and land. There are partly<br/>serious differences with regard to member state regulations and institutions affecting land,<br/>labour and capital markets. The presentation of this heterogeneity of factor markets amongst<br/>EU Member States have been implemented in the CGE models to improve model-based<br/>analyses of the CAP and other policy measures affecting agricultural production.<br/>This final report comprises the outcome of a systematic extension and improvement of the<br/>Modular Applied GeNeral Equilibrium Tool (MAGNET) model starting from an overview of<br/>the current state of the art to represent factor markets in CGE models to a description of<br/>work on labour, land and capital in MAGNET