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Extended Sensitivity Analysis for Applied General Equilibrium Models
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Abstract
Previous sensitivity analysis procedures for applied general equilibrium models have focussed on the values of exogenously assigned elasticity parameters, while the calibrated parameters -those that are obtained from combining elasticity information with flow or stock data- have been largely ignored. Calibrated parameters are central to a model´s specification, and uncertainty surrounding their values affects the credibility of the model´s results. This paper introduces and illustrates a calibrated parameter sensitivity analysis (CPSA) which, when combined with previous elasticity sensitivity analysis procedures in an `extended sensitivity analysis´, allows modelers to undertake sensitivity analysis over the full set of model parameters.Sensitivity Analysis, Calibration