| Since China adopted the reform and opening-up policy in late 1978, as an inland province, Hubei economy has grown more vigorously than ever before, in addition, native economies and advantageous industries have developed rapidly. All of these are highly correlated with the forcible measures introduced at the Chinese government. However, what extent the policy affects the economy can be measured inadequately. Therefore, we need to find one way to measure the degree of impact of the policy on the economy. The computable general equilibrium model after many years the development has already been proved to be a tool for most effective method for quantification policy analysis and prediction. Its competitive advantages lie in the following several aspects: firstly, in addition to describing microstructure clearly, making macroscopic variables and microscopic variables close integration is possible; secondly, making us has a different choice about different policies-based on CGE model behavioral assumption and parameters; thirdly, the general equilibrium frame of CGE model can state the mutual effects between multiple markets and frame structures, and it also can point out the directly and indirectly and effects on China’s whole economy’s widespread that comes from the change of a particular policy. Based on this perspective, this paper proposes a theoretical framework for CGE model of Hubei province. And based on this, establishes the CGE model of six departments in Hubei province. And then compiles macro-social accounting matrix in accordance with the statistical data of Hubei province’s actual conditions, forms an integrated and balanced dataset. The estimation of parameter for CGE model is the key factor that can decide the CGE model trends to the practical applications whether or not. This paper makes best use of the available statistics and tries to prevent the artificial given phenomenon from happening in the estimable parameter process. The estimable parameter of the model mainly adopts calibrating method and traditional econometric approach in this paper. Finally, conclusions are as follows: increased government spending and transfer payments to residents could lead to economic growth, while the transfer of rural residents relative to the intensity of the large number of urban residents when the better paid.This paper consists of the following five sections: the first section is an introduction, which mainly presents the research background, the current researches of similar problems inside and outside country,the research thoughts and innovations. The second section introduces the theoretical basis, Characteristics, general structure, advantages, limitations and new developments as well future prospects of CGE model. The third section focuses on variables, parameters and equations of the six departments in Hubei province. The fourth section describes the construction of macro-social accounting matrix of Hubei province and the estimable parameters of CGE of the six departments in Hubei province. The final section states the approaches to solving problems and applications of CGE model, and evaluates and choices the different policies. |
