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Are prices endogenous in CAPRI?

April 26, 2017capri endogenous prices

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Are prices endogenous in CAPRI?

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Yes and No. In the overall modelling system, the global trade model is responsible for simulating market clearing prices, so that prices are endogenous. However, during solution of the regional supply models, prices are fix and given, and the farmers react as price takers. An iterative link between the supply and market models ensures convergence between the prices used in the supply models and the ones generated by the market models.