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“You can’t always get what you want” : an optimal investment model for Georgia
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Yerushalmi, Erez, Labadze, Lasha and Galdava, Irakli (2015) “You can’t always get what you want” : an optimal investment model for Georgia. Working Paper. Coventry: Institute of Employment Research; University of Warwick. ISET-PI Research Reports .
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Abstract
This is a tool for the Government of Georgia to assist in investment planning at both an aggregate (macro) level and also a detailed regional-urbanity level. We develop an economywide computable general equilibrium model of Georgia. Given a certain level of funding, the model searches for the optimal investment strategy that maximizes specific social-economic targets. These include: GDP and welfare growth, income equality, employment creation, export promotion, as well as others. The small open economy is calibrated to a newly developed dataset of Georgia that includes 15 production sectors and 20 regional-urbanity households. A given amount of money is donated from abroad, i.e., it does not create distortionary wealth effects. Funding is placed into a Development Fund that channels it towards different production sectors to generate investment and promote growth. This paper summarizes the model, and focuses on the best investments at a macro-level. Officials in the government, however, have been trained to analyze various other scenarios and issues that are not covered in this paper. Overall, the paper finds that it is not possible to maximize all the social-economic targets at once. Different targets require different allocation strategies. Simply put: You can’t always get what you want!
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Alternative Title: | Optimal investment : ‘You can’t always get what you want' | ||||
Subjects: | H Social Sciences > HC Economic History and Conditions | ||||
Divisions: | Faculty of Social Sciences > Institute for Employment Research | ||||
Library of Congress Subject Headings (LCSH): | Public investments -- Georgia | ||||
Series Name: | ISET-PI Research Reports | ||||
Publisher: | Institute of Employment Research; University of Warwick | ||||
Place of Publication: | Coventry | ||||
Official Date: | November 2015 | ||||
Dates: |
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Number of Pages: | 53 | ||||
Institution: | University of Warwick | ||||
Status: | Not Peer Reviewed | ||||
Publication Status: | Published | ||||
Funder: | Deutsche Gesellschaft für Technische Zusammenarbeit |
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