MIRAGE
Source: Commission modelling inventory and knowledge management system (MIDAS)
Date of Report Generation: Mon Apr 22 2024
Dissemination: Public
© European Union, 2024
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Overview
Acronym
MIRAGE
Full title
Modelling International Relationships in Applied General Equilibrium
Main purpose
MIRAGE is a Computable General Equilibrium Model (CGE). In the European Commission it is used mainly for trade policy analysis, but it has also been used for analysing other policy areas such as agriculture and climate.
Summary
MIRAGE is a recursive-dynamic, multi-region, multi-sector CGE model used to analyse policy scenarios. It has been developed by the Centre d'Études Prospectives et d'Informations Internationales (CEPII) in Paris.
It is described in detail in Decreux, Y. and Valin, H. (2007) [1] and in Bchir, M.-H., Decreux, Y., Guérin, J.-L., and Jean, S. (2002) [2]. It is programmed in the General Algebraic Modelling System (GAMS) software.
The model has been used in-house in DG Trade for several years.
The model can be used for ex-ante analyses of policy changes to answer “what-if” type of research questions. It has also been used for ex-post analyses. The scenarios are formulated by changes to economic policy parameters, such as tariffs, non-tariff barriers, subsidies and taxes. These policy changes are usually sector specific or (less commonly) factor-specific as well as country or country-pair specific.
The standard version in MIRAGE uses the GTAP 9.2 database (Global Trade Analysis Project: https://www.gtap.agecon.purdue.edu/databases/default.asp) with the base year of 2011. In 2020, the version of the model used in DG Trade was updated to the GTAP 10 database with the base year of 2014, which is the most recent publically available version of the database also used by other CGE models such as e.g. MAGNET. For ex-ante questions, DG Trade uses recent macroeconomic projections by the IMF and the World Bank.
MIRAGE has been used in DG Trade for Impact Assessments and ex-post analyses, but would lend itself also to Sustainability Impact Assessments (SIA) carried during negotiations in order to inform negotiators, stakeholders and the general public or Economic Analyses of Negotiated Outcome (EANO) carried out after negotiations to inform co-legislators in the approval process (in fact a version of the model has been used by an external contractor for a EANO once: https://trade.ec.europa.eu/doclib/docs/2016/june/tradoc_154663.pdf).
Model categories
AgricultureClimateEconomyEnergy
Model keywords
ClimateagricultureCGEGTAPtraderecursive-dynamicex-ante Impact AssessmentNon-tariff barriers
Model homepage
http://www.mirage-model.eu/miragewiki/index.php?title=Main_Page
Ownership and Licence
Ownership
Third-party ownership (commercial companies, Member States, other organisations, …)
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 model structure is described in detail in Decreux and Valin (2007) and in Bchir et al. (2002).
MIRAGE is similar in structure to most other CGE models, such as the GTAP model.
The key features by which MIRAGE differentiates itself from the dynamic GTAP model (Gdyn) are:
- Recursive-dynamic formulation (optionally, the user can use a comparative-static version)
- Imperfect Competition (optional)
- Additional layer in Armington nesting to reflect quality differences between high-income and developing countries (optional, can be switched on for specific sectors)
- Reduced labour mobility between rural and urban sectors (optional)
Input and parametrization
- GTAP database
- CEPII estimates of non-tariff barriers in services
- World Bank estimates of non-tariff barriers in goods
- Macroeconomic projections by: IMF; World Bank; CEPII – based on various primary sources
Main output
Macroeconomic variables:
- GDP
- Wages (by skill level)
- Consumer Prices
Sector-specific variables (unless specifically mentioned, these can be added up to macro-level results):
- Bilateral imports and exports
- Total imports and exports
- Output (cannot be added up)
- Value-added
- Factor demand (Labour and capital, cannot be added up)
- CO2 emissions
Spatial & Temporal extent
The output has the following spatial-temporal resolution and extent:
| Parameter | Description |
|---|---|
| Spatial extent / country coverage | EU Member states 27ALL countries of the WORLD |
| Global | |
| Spatial resolution | World-regions (supranational)National |
| Country level (some countries are grouped into regions) | |
| Temporal extent | Short-term (from 1 to 5 years)Medium-term (5 to 15 years)Long-term (more than 15 years) |
| Base year 2014. Projections into the future are possible | |
| Temporal resolution | Years |
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
- no
- details
- CGE models routinely perform sensitivity analyses with respect to the value of key parameters or assumptions regarding the model structure. DG Trade for its in-house analyses has not engaged in quantifying these uncertainties. However, sensitivity analyses with respect to key parameters have been carried out e.g. Laborde, D., Padella, M., Edwards, R. and Marelli, L. (2014) (see references)
- 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
- See response regarding uncertainties
- url
Have model results been published in peer-reviewed articles?
- response
- yes
- details
- Analyses using the model have been published in peer-reviewed scientific journals.
- 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
- No validation has to our knowledge been published so far inside or outside of the European Commission.
- 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
- details
- The GTAP database requires a subscription.
- url
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
- no
- details
- In-house analyses contributing to DG Trade evaluation studies have regularly been published as well as academic research.
- url
Is there any user friendly interface presenting model results that is accessible to the public?
For instance: Dashboard, interactive interfaces...
- response
- no
- details
- url
Has the model been documented in a publicly available dedicated report or a manual?
Note this excludes IA reports.
- response
- yes
- details
- Please refer to the documents detailed in the summary
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
- Climate action
- Consumers
- Customs
- Economy, finance and the euro
- Energy
- EU enlargement
- Single market
- Trade
- Transport
The model is designed to contribute to the following phases of the policy cycle
- Evaluation – such as ex-post evaluation
- Formulation – such as ex-ante Impact Assessments
- Implementation – this also includes monitoring
The model’s potential
The model can be used for ex-ante analyses of policy changes to answer “what-if” type of research questions. It has also been used for ex-post analyses. The scenarios are formulated by changes to economic policy parameters, such as tariffs, non-tariff barriers, subsidies and taxes. These policy changes are usually sector specific or (less commonly) factor-specific as well as country or country-pair specific.
Although this is less commonly applied, the model can also be used for ex-post analyses. The research question would be formulated as follows: What would the situation in the last year (or the most recent year for which data is available) have been if the policy had not been implemented? And how does this compare to the actual observed situation?
These policy changes can apply to trade, including intra-EU trade, agricultural policy, climate, energy, transport and others.
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.
2021SWD/2021/266 final
Impact assessment accompanying the document Proposal for a Regulation of the European Parliament and of the Council on applying a generalised scheme of tariff preferences and repealing Regulation (EU) No 978/2012 of the European Parliament and of the Council SWD/2021/266 final
- Lead by
- TRADE
- Run by
- European Commission
- Contribution role
- baseline and assessment of policy options (indirect)
- Contribution details
- Documented in study :
The model helped to assess the following impacts:
- EU Exports & imports
- Market share & advantages in international context
- Budgetary consequences for public authorities
- Impact on vulnerable consumers
- Prices, quality, availability or choice of consumer goods and services
- Significant effects on sectors
- Impacts on third countries
- Impacts on developing countries
- Goods traded with developing countries
- Economic growth and employment
- Impact on jobs in specific sectors, professions, regions or countries
- Wages, labour costs or wage setting mechanisms
- Emission of greenhouse gases
- Environment in third countries
- Change in land use