The MIRAGRODEP Model

International Food Policy Research Institute (IFPRI)
2011

MIRAGRODEP is a global Computable General Equilibrium (CGE) model based on MIRAGE (Modelling International Relations under Applied General Equilibrium). The model was developed and improved with the support of The African Growth and Development Policy Modeling Consortium (AGRODEP). It is a multi-region, multi-sector, dynamically recursive CGE model. MIRAGE was initially developed at CEPII and was devoted to trade policy analysis; this original model was used at IFPRI prior the development of the MIRAGRODEP version and continues to be used in CEPII (France) and by various international and academic institutions around the world. The core MIRAGRODEP model is an open-source resource distributed by the AGRODEP network, with training sessions held periodically to teach researchers how to use the model.

The model

As opposed to a single country CGE model, a multi-country CGE model allows for a detailed and consistent representation of Rest of the World. In this way, international economic linkages are captured through the international trade of goods, as well as through the movement of people and capital, especially the foreign direct investment (FDI). As a global CGE, MIRAGRODEP provides a rich set of indicators for each region, which allows us to measure the impact of any policy changes on both macroeconomic aggregates and inequality indicators. Such indicators include: changes in production, production factor uses, real wages, value added by sector, real GDP, real income, exports, imports, terms of trade, land use changes, calories consumption and production per capita, and poverty head counts. The can be used under different sets of assumptions in order to be easily adaptable to the issue at hand (for example, perfect and imperfect competition, dynamic or static approach, imperfection on labor markets, or alternative macroeconomic closures).

Key innovations

Beyond the standard features of a global dynamic CGE, the MIRAGRODEP model includes several specific improvements:

  • Consistent aggregator for trade policies, as laid out in Laborde, Martin and van der Mensbrugghe (2017)
  • Sub-national land markets (agro-ecological zones or administrative districts) and endogenous land supply
  • Poverty analysis through either a top-down approach for global coverage (household modelling with a global dataset of more than 300,000 households) or a bottom-up approach (for a subset of countries).
  • Dual-Dual approach for formal/informal and rural/urban labor markets, following Stifel and Thorbecke (2003) .
  • Differentiated datasets on actual trade and farm policies and existing policy space (e.g. bound level at the WTO) for scenario design and endogenous policy responses
  • Macro nutrient (calories, fats, proteins) accounting system based on FAOSTAT food balance sheets and a global Input-Output matrix.
  • Sensitivity analysis framework based on Monte-Carlo simulations

Research questions

The MIRAGRODEP model was developed primarily to study trade policy scenarios and has been intensively used to assess bilateral and multilateral agreements and to support policymakers and civil society in different negotiations. It has also been used to study environmental and energy policies, and its quantified results have been included in actual policy design.

Datasets

The most recent version of the GTAP database is MIRAGRODEP’s main source of data; the model can cover 140 regions/countries in the world and up to 57 sectors. In addition, the database is significantly improved by adding and harmonizing additional datasets on land use, agricultural production, food balance sheets, agricultural domestic support (Ag-Incentives Consortium , WTO notifications) and trade policies (HS6 tariff and trade data), as well as updated Social Accounting Matrices for individual countries.

A realistic baseline is built based on United Nations Agencies demographic projections, as well as IMF economic growth assumptions.

In addition, various behavioral parameters (e.g. demand, supply elasticities) are frequently updated based on existing literature or on IFPRI’s econometric estimates.

 

THEMES

Multilateral and Regional trade agreements

Global Trading System

The MIRAGRODEP model has been used to support and study a range of trade policy negotiations, especially potential outcomes of the Doha Agenda and regional trade agreements (e.g. EU-ACP Economic Partnership Agreements). Tariff line-level market access scenarios are combined with other elements of these agreements (e.g. FDI, Farm policy discipline, export restrictions), as well as overall and sectoral trade impacts, macroeconomic impacts, and poverty and food and nutrition outcomes.

Source: Bouet and Laborde (2009)

The MIRAGRODEP model provides detailed analysis of the evolution of the global trading system (projections of future demand, dynamics of regional integration, etc.), as well as a unique framework to analyze that system’s institutional limits and potential improvements.

Source: Bouet and Laborde (2010)

 

 

 

 

Environmental issues and land use

Development policies

Thanks to extensive work in reconciling physical datasets (land use, carbon emissions from various sources), the MIRAGRODEP model provides a rigorous framework with which study the impact of policies for land use changes and other environmental impacts.

Source: Laborde (2011)

Due to its global general equilibrium structure and its coupling with household-level data, the MIRAGRODEP framework is well suited to study the impact of various policy instruments (including taxes, subsidies, and transfers) and various policy targets (economic sectors or population groups) on food security, hunger, and poverty.

Source: Laborde and al. (2016)

Macroeconomic trends

Foresight analysis

The MIRAGRODEP framework allows us to study the drivers and impacts of macroeconomic changes in an international context, showing the interdependence of economies. Our main focus is to study how food security, agriculture, and poverty are impacted by these large-scale changes.

Source: : Laborde and Martin (2016), p30

 

 

 

Beyond the 5-20-year time horizon of most policies studied with MIRAGRODEP, our analytical framework is also mobilized to build long-term projections (to 2050) to capture major transformations of the world economy (demographics, innovation, climate change, etc.). A specific version of the model has been developed to properly participate in stakeholder-driven scenarios for foresight exercises.

Source: Laborde (2017)