MAGNET
Source: Commission modelling inventory and knowledge management system (MIDAS)
Date of Report Generation: Thu Mar 06 2025
Dissemination: Public
© European Union, 2025
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Overview
Acronym
MAGNET
Full title
Modular Applied GeNeral Equilibrium Tool
Main purpose
A global whole-economy model used to analyse policy scenarios on agricultural economics, bioeconomy, food security, climate change and international trade.
Summary
MAGNET is a recursive dynamic, multi-region, multi-sector Computable General Equilibrium model used to analyse policy scenarios on agricultural economics, bioeconomy, food security, climate change and international trade. It was developed by the Wageningen Economic Research (WECR) in cooperation with JRC and the Thunen Institute.
MAGNET is calibrated to the GTAP database and describes production, use and international trade flows of goods and services and primary factor use differentiated by sectors. The database distinguishes 141 countries or regions (including all EU member states), 65 sectors (plus several optional MAGNET-specific extensions) and 8 factors (e.g., labour, capital, land). A distinguishing feature of the model is its modular design which allows tailoring its structure to the research question. The GTAP model forms the MAGNET core while users choose among several extensions: different nesting structures or assumptions about factor markets, different agricultural-, trade- and biofuels-policy mechanisms and different assumptions relating to investment allocation. Other modules deal with the representation of the Common Agricultural Policies (including rural development), land and labour supply, production quotas, tariff rate quotas, biofuels directive, bioenergy policies, water in agriculture, GHG emmisions (marginal abatement curves) and tracking of Sustainable Development Goals (SDGs) to name a few.
MAGNET can be used in policy formulation through ex-ante policy analysis. The model assesses policy scenarios related to agriculture and agri-food trade while taking into account other fields directly connected with agri-food production such-as bioeconomy (bioenergy, biofuel, biobased chemicals, …), sustainable use of resources (land and water), food security and nutrition (developing and developed countries) and climate change, but also feedback with the wider (non-agricultural) economy. Policy scenarios are compared against a baseline including the most recent macroeconomic (GDP and population) and agricultural (yields, land productivity, EU agricultural mid-term outlook) exogenous drivers. Focusing on ex-ante policy analysis, the model can be used to support policy formulation or to provide valuable information to policy makers in front of exogenous shocks.
Model categories
Economy
Model keywords
trade policyCAPclimate changemulti-commodity modelbaselinebioeconomyagricultural economic modelFood Securityrecursive-dynamic
Model homepage
Ownership and Licence
Ownership
Co-ownership (EU & third parties)
Ownership details
Licence type
Non-Free Software licence
The license has one or more of the following restrictions: it prohibits creation of derivative works; it prohibits commercial use; it obliges to share the licensed or derivative works on the same conditions.
Details
Structure and approach
The Modular Agricultural GeNeral Equilibrium Tool (MAGNET) is a multi-region computable general equilibrium model which is a derivative of the well-known Global Trade Analysis Project (GTAP) model. It is developed and applied at Wageningen Economic Research (WECR) at Wageningen University and Research (WUR) and is also employed by the Thünen Institute (TI) and the Joint Research Centre (JRC/D).
MAGNET is calibrated to the latest version of the GTAP database which describes production, use and international trade flows of goods and services, as well as primary factor use differentiated by sectors. The GTAP database distinguishes 141 countries or regions (among them the 27 EU member states), 65 sectors and 8 factor endowments. It is based on country input-output tables and includes consistent bilateral trade flows, transport and protection data. Additional datasets are used for specific MAGNET modules, among them data coming from the International Energy Agency (IEA), the Food and Agriculture Organization of the United Nations (FAO), the United States Department of Agriculture (USDA), the Clearance Audit Trail System (CATS) database for CAP analysis. The choice of regions and sectors from the database can be flexibly aggregated to set-up specific model versions.
MAGNET consists of a system of three types of equations. Firstly, 'behavioural equations' employing 'convenient' mathematical functions represent, under conditions of constrained optimisation, the theoretical tenets of neoclassical economic demand and supply. Subject to a series of 'market clearing' (i.e., supply equals demand) and 'accounting' equations (i.e., income equals expenditure equals output; zero 'economic' profits) consistent with the underlying accounting conventions of the database, the model enforces 'equilibrium'. To solve the model, the number of equations and (endogenous) variables within the system must be the same (known as the model 'closure'). Additional variables under the direct control of the modeller (defined as 'exogenous'), which capture market imperfections (tax rates), factor endowments or technological change, can be manipulated or 'shocked', whereupon the model finds a new matrix of prices and quantities to arrive at a post-shock equilibrium subject to the aforementioned accounting and market clearing restrictions.
A key strength of the MAGNET model is that it allows the user to choose a la carte those sub-modules of relevance to a specific study. The user can (inter alia) choose between different nesting structures, apply different assumptions about the workings of the factor markets, include different agricultural-, trade- and biofuels-policy mechanisms and incorporate dynamic assumptions relating to investment allocation over time periods.
To characterise the peculiarities of agricultural markets, the model accounts for the heterogeneity of land usage by agricultural activity; a regional endogenous land supply function; the sluggish mobility of capital and labour transfer between agricultural and non-agricultural sectors with associated wage and rent differentials; the inclusion of explicit substitution possibilities between different feed inputs in the livestock sectors; and additional behavioural and accounting equations to characterise EU agricultural policy mechanisms (e.g., production quotas, single farm payment, coupled payments, rural development measures). For the CAP module, additional coupled and decoupled policy variables are included to allow or a finer representation of CAP policy shocks. Furthermore, a detailed set of CAP policy payments, taken from the Clearance of Accounts Audit Trail System (CATS) database (DG AGRI) are used as a basis for calculating ‘CAP reference scenario’ shocks. In addition, an ‘own-resources’ module is included within the CAP budget accounting equations. Further modelling enhancements are incorporated including of ‘first’ and ‘second’ generation biofuels, GHG emission, water indicators. Other modules include treatment of waste, enhancement of labour market, fishery, inclusion of other climate policies and damage function and a specific module on Sustainable Development Goals (SDGs) indicators.
The results of the MAGNET model are typically presented in value terms or in price and quantity percentage changes. The MAGNET model compiles a large number of indicators, in particular related to production, trade flows, consumption, use of endowments, intermediate input use, income and price changes, land use, emissions, employment. As an additional tool of analysis, this study draws on the GEMPACK decomposition method. On running a complex scenario with an array of shocks (i.e., endowments, tariffs, technology change etc.), it is possible to calculate the part-worth of the resulting endogenous variable change that corresponds to a specific exogenous shock, or pre-specified group of exogenous shocks. Thus, when comparing each of the scenarios with the reference scenario, the comparative ‘part-worth’ importance of each of the policy indicators is evaluated in order to better understand the role that policy has to play (if any) in shaping bio-based market trends.
Input and parametrization
The key inputs used for the model:
- Value of Margins on international trade (GTAP database)
- Value of Bilateral imports and exports (GTAP database)
- Value of Intermediate and production factors use by industries (GTAP database)
- Value of commodity outputs (GTAP database)
- Value of Capital stock (GTAP database)
- Value of Tax revenues (GTAP database)
- Ad-valorem rate of several tax instruments (GTAP database)
- Income elasticities (GTAP database)
- Armington elasticities (GTAP database)
- Production elasticities (GTAP database)
- EU Agricultural Production and net trade (DG AGRI Agricultural Outlook)
- GHG emission for the (EU Reference Scenario 2016 on energy, transport and climate action; GECO)
- Land supply (FAOSTAT)
- CAP payments (CATS database)
- GDP and population projections (various sources)
The use of MAGNET requires, at a minimum, an understanding of the standard GTAP model and an ability to read GEMPACK code.
Main output
- Macroeconomic variables (GDP, welfare, value added, savings-investments, current account, world prices)
- Sectorial indicators (production, consumption, prices, bilateral trade)
- Production factors (employment, wage, land use and price, capital)
- Additional indicators tailored on the study (water, bioenergy, biofuel, …)
- Nutrition indicators
- Food security indicators (availability, access, utilisation)
- GHG indicators (CO2, Non-CO2)
- Sustainable Development Goals Indicators
MAGNET analyses the economy-wide and distributional impacts of policy and/or structural shocks, sectoral transmission of sector-specific policies for sectors, agents and regions. The output of MAGNET includes projections of input-output tables, GDP, employment, bilateral trade, capital flows and household consumption. The explicit formulation of representative households allows the derivation of welfare indicators.
Spatial & Temporal extent
The output has the following spatial-temporal resolution and extent:
Parameter | Description |
---|---|
Spatial extent / country coverage | ALL countries of the WORLD |
Spatial resolution | World-regions (supranational)National |
Temporal extent | Short-term (from 1 to 5 years)Medium-term (5 to 15 years)Long-term (more than 15 years) |
Baseyear 2014, can run in time step up to 2100. | |
Temporal resolution | Years |
To be selected by the modellers, minimum 1 year. |
Quality & Transparency
Quality
Model uncertainties
Models are by definition affected by uncertainties (in input data, input parameters, scenario definitions, etc.). Have the model uncertainties been quantified? Are uncertainties accounted for in your simulations?
- response
- yes
- details
- Partially. Uncertainty analyses are performed with regard to data, parametrs and exogneous assumptions to the aim of the specific research question. MAGNET is unique as it is able to perform sensitivity analyses with regard to model structure due it modular set up. Many scientific paper include uncertainty analyses directed at research question.
- url
Sensitivity analysis
Sensitivity analysis helps identifying the uncertain inputs mostly responsible for the uncertainty in the model responses. Has the model undergone sensitivity analysis?
- response
- yes
- details
- Partially. Not accounted for systematically, but most relevant ones tested via additional simulations. Sensitivity analyses are performed with regard to data, parametrs and exogneous assumptions to the aim of the specific research question. MAGNET is unique as it is able to perform sensitivity analyses with regard to model structure due to its modular set up. Many scientific papers include sensitivity analyses.
- url
Have model results been published in peer-reviewed articles?
- response
- yes
- details
- Scenarios to account mainly sensitivity are usually added to main analyses. Results published on regular basis in (high impact) journals such as Nature, Nature Climate Change, Nature Communications, Environmental Research Letter, Agricultural Economics.
- url
Has the model formally undergone scientific review by a panel of international experts?
Please note that this does not refer to the cases when model results were validated by stakeholders.
- response
- no
- details
- url
Model validation
Has model validation been done? Have model predictions been confronted with observed data (ex-post)?
- response
- no
- details
- There has been no formal evaluation of the model by an external panel, however the model has been extensively published in peer-reviewed journals and is widely regarded as state-of-the-art global Computable General Equilibrium of agricultural and bioeconomy analysis.
- url
Transparency
To what extent do input data come from publicly available sources?
This may include sources accessible upon subscription and/or payment
- response
- Entirely based on publicly available sources
Is the full model database as such available to external users?
Whether or not it implies a specific procedure or a fee
- response
- yes
Have model results been presented in publicly available reports?
Note this excludes IA reports.
- response
- yes
- details
Have output datasets been made publicly available?
Note this could also imply a specific procedure or a fee.
- response
- yes
- details
- Through publications in reports and journals, as well as in the data platform dataM.
- url
Is there any user friendly interface presenting model results that is accessible to the public?
For instance: Dashboard, interactive interfaces...
- response
- yes
Has the model been documented in a publicly available dedicated report or a manual?
Note this excludes IA reports.
- response
- yes
- details
- See model documentation, Woltjer G., Kuiper M., Kavallari, A., van Meijl, H., Powell, J., Rutten, M., Shutes, L., Tabeau, A. (2014). The MAGNET model - Module description. Agricultural Economics Research Institute (LEI), LEI Report 14-057. The Hague, Netherlands.
Is there a dedicated public website where information about the model is provided?
- response
- yes
- details
- url
Is the model code open-source?
- response
- no
- details
Can the code be accessed upon request?
- response
- no
- details
The model’s policy relevance and intended role in the policy cycle
The model is designed to contribute to the following policy areas
- Agriculture and rural development
- Economy, finance and the euro
- Energy
- Environment
- Regional policy
The model is designed to contribute to the following phases of the policy cycle
- Formulation – such as ex-ante Impact Assessments
The model’s potential
This economic simulation model, as a contribution to this impact assessment process, can provide insights into the effects of different policy scenarios on international trade and competitiveness.
The model is designed to conduct policy experiments, in which a reference scenario or baseline is first simulated over a future period and then, after changing one or more underlying assumptions (all kind of police instruments, tax, tariffs...), a new scenario incorporating these changes is run, also over the same time period. Comparison of the new scenario with the reference scenario at a given point in the simulation period, usually in terms of percentage differences, establishes the direction and relative magnitude of the impacts on all the endogenous variables of the change that is depicted in the hypothetical scenario at that point in time.
Previous use of the model in ex-ante impact assessments of the European Commission
Use of the model in ex-ante impact assessments since July 2017.
2023SWD/2023/421 final
Impact Assessment accompanying the document Directive of the European Parliament and of the Council amending Directive 2008/98/EC on waste
- Lead by
- ENV
- Run by
- European Commission
- Contribution role
- baseline and assessment of policy options
- Contribution details
The study utilizes the further adapted computable general equilibrium model MAGNET and employs a range of sustainability indicators to analyse the economic, social, and environmental impacts associated with the reduction of food waste for the different policy options.
2018SWD/2018/301 final
Impact assessment accompanying the document Proposal for a Communication: on modernising and simplifying the common agricultural policy
- Lead by
- AGRI
- Run by
- European Commission
- Contribution role
- baseline and assessment of policy options
- Contribution details
The model helped to assess the following impacts:
- Equal treatment of products and businesses
- EU Exports & imports
- Non-trade barriers
- Cost of doing business
- Market share & advantages in international context
- Stimulation of research and development
- Prices, quality, availability or choice of consumer goods and services
- International legal commitments
- EU foreign policy and EU development policy
- Impacts on third countries
- Impacts on developing countries
- Goods traded with developing countries
- Impact on jobs
- Impact on jobs in specific sectors, professions, regions or countries
- Indirect effects on employment levels
- Factors preventing or enhancing the potential to create jobs or prevent job losses
- Wages, labour costs or wage setting mechanisms
- Households income and at risk of poverty rates
- Inequalities and the distribution of incomes and wealth
- Emission of greenhouse gases
- Waste production, treatment, disposal or recycling
- Sustainable production and consumption
- Environment in third countries
- Change in land use