Removal of farm subsidies in a regional economy: a computable general equilibrium analysis

Francisco Javier de Miguel (1) , Antonio Manresa (2)

1 Department of Applied Economics
2 Economic Theory

The purpose of this paper is to analyse the importance of farm subsidies for the Extremadura economy. To this end, a computable general equilibrium model for this region is presented, with which we analyse the economic effects caused by a simulated removal of these subsidies. Different scenarios involving the labour market rigidities and tax compensation are considered. Model parameters are determined by the procedure known as calibration, using a social accounting matrix constructed for this economy. The results clearly show the negative effects that this elimination would produce on the main micro and macroeconomic variables.

Mots clés: Social Sciences & Humanities

Francisco Javier de Miguel, Antonio Manresa. Removal of farm subsidies in a regional economy: a computable general equilibrium analysis. Applied Economics, 2008, 40 (16), pp.2109-2120. ⟨10.1080/00036840600949371⟩. ⟨hal-00582074⟩