Romod: A dynamic CGE Model for Romania. A Tool for Policy Analysis

The general framework developed in this study has three main aims:

  • To provide a better understanding of the structural relationships between the
    different economic agents in Romania;
  • To develop a quantitative instrument to assist the Romanian policymakers in
    evaluating the effects of different fiscal-budgetary policy measures;
  • To evaluate the socio-economic effects of some measures aiming at
    harmonizing taxes with the EU requirements and restructuring public
    expenditures.

A computable general equilibrium (CGE) for the Romanian economy, called
RoMod, has been developed to address the specific requirements in evaluating the
effects of fiscal-budgetary policy measures. RoMod allows an evaluation of fiscal-budgetary policy measures on a much wider scale than the very few models developed so far for the Romanian economy, with its very detailed tax structure. Furthermore, it provides comprehensive results in terms of sectoral output, employment, capital, energy use, private and public consumption by commodity, exports and imports and their price structure.