n CPEEL Monograph Series - Sustainable mineral development, inclusive growth and development : linkages and results from a general equilibrium model

Abstract

This section discusses the methodology and results obtained from the use of a Computable General Equilibrium (CGE) model to examine the macroeconomic impacts of mineral policy on the Nigerian economy. CGE Models have several advantages such as the following:

---

i. They incorporate all economic interactions in an economy,

---

ii. They provide a laboratory for quantitative assessments of total effects (direct and indirect) of policy changes,

---

iii. They capture the interdependencies among economic sectors, economic agents and economic markets, and

---

iv. They capture feedbacks among production block, income block, expenditure block and trade blocks.

In addition, the underlying database is provided by the Social Accounting Matrix (SAM) which ensures data coherency and consistency and they help to isolate the economic effects of specific policy shocks. The CGE model utilized for this report is a variant of the PEP 1-1 Single Country Model developed by Decaluwe et al. (2010).