MIRAGE history
The development of an appropriate model for analyzing the consequences of trade policy reforms is the primary motivation that led CEPII to the development of the MIRAGE (Modelling International Relationships in Applied General Equilibrium) model in 2001.
Compared with the two similar multi-sectoral and multi-regional computable general equilibrium (CGE) models in existence at the time, Linkage at the World Bank and GTAP at Purdue, MIRAGE innovated in several aspects. As for modeling, MIRAGE incorporates imperfect competition, product differentiation by variety and quality, and foreign direct investment in a sequential dynamic set-up (Bchir et al. 2002). As for data (calibration and counter-factual scenarios), MIRAGE draws upon a very detailed measure of tariff barriers, thanks to the in-house development of the MAcMap-HS6 (Market Access Map HS6) database (Bouët et al. 2008; Guimbard et al. 2012).
Since trade policy negotiations revolve a lot around agricultural issues, there was the need to represent this sector with particular details. That’s why, in 2007, MIRAGE evolved in order to assess better the trade policy effects in the agricultural sectors with new modeling of export subsidies, intervention price and production quotas in the European Union, land imperfect allocation across different crops, capital and land subsidies, imperfect mobility of labor between agricultural and non-agricultural sectors. At this time, the dynamic framework of the model has also been improved. The reservoir of labor is adjusted with respect to the United Nations forecast, and the total factor productivity growth is computed to match the World Bank economic growth forecast. For developing countries, the migration from rural areas to urban areas is also accounted for (Decreux and Valin 2007).
Given the complexity of the negotiation on the Doha Round Agenda and the signature of deep regional agreements around the world, MIRAGE also starts including various measures of trade barriers outside tariffs, such as estimates of the protection in services (Fontagné, Mitaritonna, and Signoret 2016), equivalent ad valorem for non-tariff measures in goods as well as estimates of the administrative and transaction costs to be reduced by trade facilitation measures (Bouët and Laborde 2010; Decreux and Fontagné 2015).
Since 2012, MIRAGE has moved forward towards long-term issues: energy efficiency and prices, agricultural productivity, and CO\(_2\) emissions. All these features are included in a new version of the model MIRAGE, nicknamed MIRAGE-e. For MIRAGE-e and the versions that have followed it, the dynamic baseline follows the macroeconomic projections of MaGE model (Fontagné, Fouré, and Ramos 2013; Fouré, Bénassy-Quéré, and Fontagné 2013; Fontagné, Perego, and Santoni 2022).
The interactions between trade and environmental policies have recently become an important subject for CEPII research agenda, spurring a new wave of developments. The MIRAGE team has updated the version of its CGE model in two distinct versions: MIRAGE-VA and MIRAGE-Power, both embedding a detailed representation of greenhouse gas emissions. While the MIRAGE-VA explicitly models global value chains, MIRAGE-Power includes renewable and nuclear energies as possible sources for electricity generation. Both models can activate specific climate policy features such as the EU Emission Trading System and the Carbon Border Adjustment Mechanism (Bellora and Fontagné 2023).
This website provides in the Documentation section all the technical details for the different variants of the MIRAGE model.