Economic Policy Research Center is determined to establish modern and innovative methods for economic research in Georgia. In this direction it is noteworthy that EPRC is the author of Computable General Equilibrium (CGE) model for Georgian Economy. The model is created in compliance with western experience in economic modeling. This was the very first instance of using economic prognosis using modern standards. At the same time, with the help of modern technologies and methodology, the web-site www.priceofthestate.ge has been created, that gives a possibility to calculate state budget revenues and expenditure burden from per capita and per employed perspective. The web-site also includes a simulation feature for virtual budget formation.
CGE MODEL CREATION FOR GEORGIAN ECONOMY
Donor: World Bank/EERC
Purpose of the project
The project envisages development of Computable General Equilibrium (CGE) model to describe market-oriented economy of Georgia. With CGE model, quantities and prices in various equilibrium can be computed and simulation analysis can be performed to infer what will happen if different policies, i.e. fiscal regulations, sectoral policies, international trade regulation or environmental policies are introduced. Quantities of consumption, output, imports, exports, savings, investments and other macro variables, in each commodity sector can be computed to analyze economic structure in detail.
The Brief about CGE Modeling and the ways it can be employed for macroeconomic policy analysis for Georgia
PRICE OF THE STATE
program Duration: 2012 - 2013
Purpose of the project
Purpose of this project is to establish innovative methodology for conducting research on economic effectiveness of public finances and expenditures (among them separate programs and social-economic initiatives), by analyzing budgetary expenses from per capita or per employed individual perspective, which would help understand the real “state burden” for each citizen and each working individual). Overall objectives of the project is informing general public about public sector operations by providing easy to understand relevant information and enabling students and academic cycles to use it as a teaching tool for public finance.
Establishing such practice of research and making it available and accessible for the public in an understandable manner will help citizens realize their personal financial role in the State, which will raise civil awareness. Individuals will have an easy reference to understand the sources of budgetary expenditures, to assess the necessity of particular budgetary expenses proposed by the State, and to analyze the economic affects that an increase in budgetary expenses has on their pockets. Thus, the aim of the project is to empower citizens with knowledge and information needed to engage actively and meaningfully in critically important budgetary processes at every stage – formation, allocation, implementation and monitoring. The capacity to understand the budgetary processes and priorities of the government is a necessary step towards a greater objective of politically engaged citizenry and a more accountable government.