Computable general equilibrium (CGE) models are quantitative economic models that represent the interrelationships between different sectors of an economy and the behavior of various agents, such as consumers, firms, and governments. They are used to simulate how changes in policy, technology, or external factors affect economic outcomes, providing a bridge between theoretical economic concepts and real-world applications. By incorporating data on economic activities, CGE models enable economists to predict the effects of changes in economic policies or conditions in a comprehensive manner.
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