CGE tax modeling

A CGE tax model is a formal description of the economic relationships among producers, households, government and the rest of the world.

It is general in the sense that it takes all the important markets and flows into account. It is an equilibrium model because it assumes that demand matches supply in every market; this is achieved by allowing prices to adjust within the model. It is computable because, with the help of a computer, it can be used to generate numerical solutions to concrete policy and tax changes.

And it is a tax model because it pays particular attention to the role played by different taxes.

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The Beacon Hill Institute at Suffolk University in Boston, Massachusetts focuses on federal, state and local economic policies as they affect citizens and businesses. The Institute conducts research and educational programs to provide timely, concise and readable analyses that help voters, policymakers and opinion leaders understand today’s leading public policy issues.