Model

MAGNET stands for the Modular Applied GeNeral Equilibrium Tool. It is a global computable general equilibrium model, which can be flexibly tailored to specific research questions at hand and regions and products of interest. MAGNET is the successor of the LEITAP model extensively used in policy analyses in the past. Both LEITAP and MAGNET are based on the standard GTAP model. The core of MAGNET is the GTAP model, to which multiple adaptions and extensions have been added, including those listed below. Noteworthy, MAGNET is compatible with both GTAPv6 and GTAPv7.

Differences in substitutability of land between sectors
Imperfect mobility of labor between agricultural and non-agricultural sectors
Output quotas for milk and sugar
Endogenous land supply
Biofuel sectors (1st and 2nd generation) and the biofuel directive
Modulation of the EU common agricultural policy from first to second pillar measures
Income elasticities dependent on GDP per capita
International capital mobility for dynamic analyses
Nutrition indicators
Household food security indicators
Circularity module: municipal solid waste flows and treatment options
Aquaculture and seaweed sectors
Endogenous natural resource stocks
Emission permit trading and mac curves, luluc emissions
Climate damage assessment
Adaptions for investments, bilateral tariff rate quota, alternative consumption functions etc.

The Foundation of MAGNET: GTAP Core

The standard GTAP model (Version 6.2 of September 2003) was the starting point for developing MAGNET. GTAP is a general equilibrium model covering all sectors of the economy (agriculture, manufacturing and services) in contrast to partial equilibrium models, which focus on subsets of an economy. GTAP is a global model, covering all regions and major countries in the world. A region may include several countries for which there is no individual country data.

Figure 1: MAGNET – an economic model of nations in the global economy MAGNET

In the GTAP model, the regional household supplies factors (i.e. land, skilled and unskilled labour, capital and natural resources) to the production sectors. By combining these factors with intermediate inputs from other sectors, commodities are produced. Produced commodities are either supplied to domestic markets to satisfy the demand for commodities by private households and governments or they are exported.

For every region in the model there is a single representative household demanding consumption goods (including savings) on the behalf of the private household and the government. Total demand is determined by income earned by land, labour and capital as well as income from taxes. The demand for goods can be met by national producers or by imports. Each commodity is produced by one sector, while each sector produces only one commodity. For each sector there is a single producer, i.e. there is one producer of wheat, one for gas, one for wood products, etc.

The model includes trade between all regions in the model and accounts for trade barriers between regions via tariffs. These tariffs may drive a wedge between prices in regions, i.e. the same product may be more expensive in one region than in another because of tariffs. Whereas international trade is modelled by tracing all bilateral flows, international capital flows are governed by a global bank. This bank collects savings and uses them for international investments. Since savings are pooled by the global bank before being used for investments, it is not possible to trace bilateral capital flows.

Prices of goods and of land, labour and capital in each region adjust to assure that both national and international demand and supply are equal, hence the term general equilibrium model. Thus, when a policy simulation is run, for example to analyze the impacts of lowering tariffs between regions, the model computes by sector the production, consumption and trade (both imports and exports) as well as price levels that result in equilibrium in national and international markets.

More information on the standard GTAP model can be found on the GTAP website.

MAGNET Philosophy

The development of MAGNET has been driven by the following key principles:

A modular set-up around a GTAP core: the modular set-up has been designed such that all model extensions can be switched on through choices in a single parameter file, sometimes in combination with changes in closure file. This allows new users to start with GTAP and then add extensions as needed. For experienced users it facilitates the tailoring of the model structure to the research question at hand, and eases debugging when developing the model. The GTAP model was chosen as a starting point because it is a widely used CGE model and the associated GTAP network provides a common background which enables comparison with a wide variety of other CGE models developed from the GTAP model.
The GTAP core is kept intact with only minimal changes. A notable change is the introduction of a distinction between production sectors and produced commodities throughout the model to introduce by-products. Data are kept and processed at the lowest level of detail to allow the user to aggregate the GTAP regions into groups that are relevant for the research question. All databases are kept as provided by their original sources and processed at the lowest level of detail.
All data changes and adjustments are coded in GEMPACK to enhance tractability and quality control. In addition, this approach facilitates the updating of datasets since the same code can be applied to the updates.

MAGNET Regions and Countries

MAGNET covers 141 regions and countries (table 1). Currently (2020), MAGNET is based on Version 10 of the GTAP database.

Table 1: MAGNET countries and regions


Country number	Country name	Country number	Country name	Country number	Country name
1	Australia	48	Rest of Central America	95	Armenia
2	New Zealand	49	Dominican Republic	96	Azerbaijan
3	Rest of Oceania	50	Jamaica	97	Georgia
4	China	51	Puerto Rico	98	Bahrain
5	Hong Kong	52	Trinidad and Tobago	99	Iran Islamic Republic of
6	Japan	53	Caribbean	100	Israel
7	Korea Republic of	54	Austria	101	Kuwait
8	Mongolia	55	Belgium	102	Jordan
9	Taiwan	56	Bulgaria	103	Oman
10	Rest of East Asia	57	Croatia	104	Qatar
11	Brunei Darussalam	58	Cyprus	105	Saudi Arabia
12	Cambodia	59	Czech Republic	106	Turkey
13	Indonesia	60	Denmark	107	United Arab Emirates
14	Lao People’s Democratic Republic	61	Estonia	108	Rest of Western Asia
15	Malaysia	62	Finland	109	Egypt
16	Philippines	63	France	110	Morocco
17	Singapore	64	Germany	111	Tunisia
18	Thailand	65	Greece	112	Rest of North Africa
19	Viet Nam	66	Hungary	113	Benin
20	Rest of Southeast Asia	67	Ireland	114	Burkina Faso
21	Bangladesh	68	Italy	115	Cameroon
22	India	69	Latvia	116	Cote d’Ivoire
23	Nepal	70	Lithuania	117	Ghana
24	Pakistan	71	Luxembourg	118	Guinea
25	Sri Lanka	72	Malta	119	Nigeria
26	Rest of South Asia	73	Netherlands	120	Senegal
27	Canada	74	Poland	121	Togo
28	United States of America	75	Portugal	122	Rest of Western Africa
29	Mexico	76	Romania	123	Central Africa
30	Rest of North America	77	Slovakia	124	South Central Africa
31	Argentina	78	Slovenia	125	Ethiopia
32	Bolivia, Plurinational State of	79	Spain	126	Kenya
33	Brazil	80	Sweden	127	Madagascar
34	Chile	81	United Kingdom	128	Malawi
35	Colombia	82	Switzerland	129	Mauritius
36	Ecuador	83	Norway	130	Mozambique
37	Paraguay	84	Rest of EFTA	131	Rwanda
38	Peru	85	Albania	132	Tanzania United Republic of
39	Uruguay	86	Belarus	133	Uganda
40	Venezuela	87	Russian Federation	134	Zambia
41	Rest of South America	88	Ukraine	135	Zimbabwe
42	Costa Rica	89	Rest of Eastern Europe	136	Rest of Eastern Africa
43	Guatemala	90	Rest of Europe	137	Botswana
44	Honduras	91	Kazakhstan	138	Namibia
45	Nicaragua	92	Kyrgyzstan	139	South Africa
46	Panama	93	Tajikistan	140	Rest of South African Customs
47	El Salvador	94	Rest of Former Soviet Union	141	Rest of the World

MAGNET Sectors and Commodities

MAGNET covers 113 sectors and 127 commodities (table 2). Currently (2020), MAGNET is based on Version 10 of the GTAP database.

Table 2: MAGNET and GTAP sectors/commodities


Number	Name	Number	Name	Number	Name
1	Paddy rice	23	Processed rice	45	Manufactures nec
2	Wheat	24	Sugar	46	Electricity
3	Cereal grains nec	25	Food products nec	47	Gas manufacture, distribution
4	Vegetables, fruit, nuts	26	Beverages and tobacco products	48	Water
5	Oil seeds	27	Textiles	49	Construction
6	Sugar cane, sugar beet	28	Wearing apparel	50	Trade
7	Plant-based fibers	29	Leather products	51	Accommodation, Food and service
8	Crops nec	30	Wood products	52	Transport nec
9	Bovine cattle, sheep and goats	31	Paper products, publishing	53	Water transport
10	Animal products nec	32	Petroleum, coal products	54	Air transport
11	Raw milk	33	Chemical products	55	Warehousing and support activities
12	Wool, silk-worm cocoons	34	Basic pharmaceutical products	56	Communication
13	Forestry	35	Rubber and plastic products	57	Financial services nec
14	Fishing	36	Mineral products nec	58	Insurance
15	Coal	37	Ferrous metals	59	Real estate activities
16	Oil	38	Metals nec	60	Business services nec
17	Gas	39	Metal products	61	Recreational and other service
18	Minerals nec	40	Computer, electronic and optic	62	Public Administration and defe
19	Bovine meat products	41	Electrical equipment	63	Education
20	Meat products nec	42	Machinery and equipment nec	64	Human health and social work a
21	Vegetable oils and fats	43	Motor vehicles and parts	65	Dwellings
22	Dairy products	44	Transport equipment nec

Table 3: Additional MAGNET sectors/commodities


Number	Name	Number	Name	Number	Name
66	Animal feed	82	Mixed fossil biochemical sector	98	Crustaceans
67	Crude vegetable oil	83	Electricity from coal	99	Marine fish
68	Biogasoline	84	Electricity from gas	100	Molusks
69	Biodiesel	85	Electricty from nuclear	101	Fish processing
70	Fertilizer nutrient n	86	Electricty from hydro	102	Bioplastics
71	Fertilizer nutrient p	87	Electricty from wind and solar	103	Fossil kerosine
72	Fertilizer nutrient k	88	Bioelectricity 2nd gen	104	Biokerosine
73	Biofuel feedstock grains	89	Residue sector	105	Waste Collection rest waste
74	Biofuel feedstock sugar	90	Pellet sector	106	Waste collection green waste
75	Biofuel feedstock molasse	91	Plantation	107	Composting
76	Biofuel feedstock oils	92	Poultry live animals	108	Incineration
77	Ftfuel 2nd gen biofuel	93	Poultry meat	109	Landfilling
78	Ethanol 2nd gen biofuels	94	Beef cattle	110	Waste collection glass paper
79	Ligno sugar	95	Beaf meat	111	Recycling
80	Pe biochemical	96	Diadromis fish	112	Heat
81	Pla biochemical	97	Fresh water fish	113	Bioheat
				114	Seaweed

Table 4: Additional MAGNET commodities - byproducts


Number	Name
114	DDGS: byproduct of Biogasoline sector
115	Molasse: buproduct of Sugar sector
116	Oil cake: byproduct of Crude vegetable oil sector
117	Residue pdr: byproduct of Paddy rice sector
118	Residue wheat: byproduct of Wheat sector
119	Residue gro: byproduct of Cereal grains nec sector
120	Residue osd: byproduct of Oil seeds sector
121	Residue ocr: byproduct of Cereal grains nec sector
122	Residue frs: byproduct of Forestry sector
123	Residue v_f: byproduct of Vegetables, fruit, nuts sector
124	Fish meal: byproduct of Fish processing sector
125	Biomass: byproduct of Composting sector
126	Recycled paper and glass: byproduct of Recycling sector
127	Energy from waste: byproduct of Incineration sector

Software and System Requirements

Requirements for running the entire MAGNET system include the following:

Software licenses for GEMPACK, INTEL FORTRAN Compiler 11 (64 bit)
Data licenses for at least one GTAP database, use of specific modules may require additional database licenses
64 bit machine with at least 16 GB RAM
For DSS (the modelling interface) .Net 4.0 is required; can be freely downloaded, but must be installed
GTREE (the code viewer and editor) must be installed, available for free on request
Preferably an SVN server is available; for easy tracking of adjustments made to data and programs and updating to new versions of MAGNET.