i woke up with this notion, which i should have remembered, but forgot remembering earlier.
Earlier, some economists warned that the size of the first recovery package was not big enough to make a significant impact on the US economy and unemployment situation.
If that had been the case, the outcome of computable generalized equilibrium model of the recovery package on the US economy and employment may not be impressive. In that case, as economists may do so as standard procedure, the CGE analyses may be run with several scenarios of the different sizes of recovery packages: (A) the case of the actual recovery package, (B) the benchmark scenario of no recovery package, (C) several scenarios of what if the recovery package had been far bigger, what would have happened to the economy and unemployment? (with a few scenarios of bigger, far bigger recovery package sizes; may provide good justification of future recovery packages)
Original Text: It’s again a random thought. The kind of thing that pops out when doing random things, like driving, doing dishes, chores, or taking shower etc. i seem to do more intensive thinking when doing dishes or grocery etc. Again, while i was driving, it occurred to me that maybe there may be a possibility of measuring the impact of the economic stimulus package on the US economy. It’s because, although the stimulus package has done something good in terms of creating jobs, improving the US economy, it still gets criticized, attacked by ignorant people. And the only defense of the package has been “It Could have Been Worse” without it.
“Computable general equilibrium (CGE) model”
i don’t know this model in detail. i hadn’t used it. if i had stayed in academia i would have taken the training program for using this model. i just read the rough description of this model. it just occur to me that there may be a way of measuring the effect of stimulus package on the US economy by using this CGE model. As wickipedia shows, “CGE models are a class of economic models that use actual economic data to estimate how an economy might react to changes in policy, technology or other external factors. CGE models are also referred to as AGE (applied general equilibrium) models.
The outcome of this model may vary, depending on how the model settings are conditioned by the analysts, which economists do the analysis with what intention, etc. But if properly, fairly done, this model could be a way of answering, closing this arguments of recovery package and finding the justification of having another one??? Probably right economists should have some answer to this.
Advertisement
