Planning for Economic Recovery of South Asia from COVID-19- “Strengthening General Equilibrium Modelling Capacity in India”

NCAER will partner with ADB to build cutting-edge CGE modelling capacity in India in collaboration with the world’s leading CGE centers. Building on past CGE work and existing modelling capacity, the research institute will build dynamic, quarterly, and regional model variants to serve the policymaking community with economic policy simulations that enable better policy, program and investment choices in macro, industry, services, agriculture, trade, environment, land and labor. Efforts to bring in some dimension of rural-urban segmentation will be explored so as to enable analysis of selected issues relating to urban development.

Robust economic modelling offers both policy analysts and policymakers the opportunity to examine the impact of policy changes on their economies. Such models are particularly useful when they are economy wide, can offer quantitative impact assessments and sensitivity analysis around policy options, incorporate the influence of both domestic and foreign market developments, and can link assumptions and policy scenarios to outcomes. Economy-wide models allow analysts to trace the impact of economic changes and policies as their price and quantity effects ripple through the economy. Quantitative models offer a tool to articulate tradeoffs, including those important from a political economy perspective, showing the costs and benefits of “what-if” policy changes to key stakeholders.