Farmer and Wendner (2004) consider the sensitivity of policy effects, as implied by dynamic multi-sector computable general equilibrium models, with respect to the specification of capital and investment aggregation. They demonstrate that (small) differences in the specification of capital and...

Dynamic multi-sector computable general equilibrium (CGE) models often utilize investment aggregation according to fixed shares. The question is, do these models come to the same policy conclusions as CGE models that derive sectoral investment shares by optimal household decisions in a framework...