About the G-Cubed Model

The G-Cubed model was developed by Warwick McKibbin and Peter Wilcoxen. The model has been constructed to contribute to the current policy debate on environmental policy and international trade with a focus on global warming policies, but it has many features that will make it useful for answering a range of issues in environmental regulation, microeconomic and macroeconomic policy questions. It is a world model with substantial regional disaggregation and sectoral detail. In addition, countries and regions are linked both temporally and intertemporally through trade and financial markets.

G-Cubed contains a strong foundation for analysis of both short run macroeconomic policy analysis as well as long run growth consideration of alternative macroeconomic policies. Intertemporal budget constraints on households, governments and nations (the latter through accumulations of foreign debt) are imposed. To accommodate these constraints, forward looking behavior is incorporated in consumption and investment decisions. G-Cubed also contains substantial sectoral detail. This permits analysis of environmental policies which tend to have their largest effects on small segments of the economy. By integrating sectoral detail with the macroeconomic features of the MSG2 model, G-Cubed can be used to consider the long run costs of alternative environmental regulations yet at the same time consider the macroeconomic implications of these policies over time. The response of monetary and fiscal authorities in different countries can have important effects in the short to medium run which, given the long lags in physical capital and other asset accumulation, can be a substantial period of time.

Overall, the model is designed to provide a bridge between computable general equilibrium models and macroeconomic models by integrating the more desirable features of both approaches.

Variants of G-Cubed

USA, Japan, Germany, UK, France, Italy, Rest of Euro Zone, Canada, Australia, ROECD, Korea, Turkey, China, India, Indonesia, Other Asia, Mexico, Argentina, Brazil, Russia, Saudi Arabia, South Africa, OPEC, ROW

USA, Japan, UK, Germany, Rest of Euro Zone, Canada, Australia, Korea, ROECD, China, India, Indonesia, Other Asia, Latin America, Eastern Europe and former Soviet Union, OPEC, Rest of World.

USA, Japan, Europe, ROECD, China, EEB, OPEC, ROW

USA, Japan, Europe, ROECD, China, India, RUssia, OPEC, ROW

USA, Japan, Europe, ROECD, China, EEB, OPEC, ROW

USA, Japan, Europe, ROECD, China, India, Russia, OPEC, ROW

Research using G-Cubed