CITE (Computable Induced Technical change and Energy) is a dynamic general equilibrium model of the world economy with special focus on Switzerland and energy commodities. In CITE households provide capital and labor to firms which use these factors to produce commodities. These commodities are either sold to domestic industries as intermediate input and consumers or exported to other regions. CITE includes the main economic sectors in the different regions. Recently, the model has been extended to include a detailed electricity production module with different generation technologies. CITE is a dynamic model including (endogenous) economic growth elements. I.e. consumers save money which is lend to firms which invest in either physical capital (new machines) or knowledge which increases the productivity of capital and labor. Given the described features, CITE is well suited for the assessment of environmental and climate regulation in particular within in the electricity sector in a dynamic framework.

Sectoral output

Model inputs

  • Social accounting matrices (GTAP)
  • Swiss input/output table (Swiss Federal Office of Energy)
  • Elasticities: MIT Emissions Prediction and Policy Analysis (EPPA) model (Paltsev et al, 2005)
  • For spillovers: EPO World Patent Statistical Database (PATSTAT) and OECD Patents Database (OECD)

Model outputs

  • Welfare
  • Consumption
  • Economic growth, sectoral growth
  • Investment: Physical and Knowledge
  • Production by economic sector


Detailed model description

  • Bretscher, L, Ramer, R. and Schwark, F. (2011): Growth effects of carbon policies: Applying a fully dynamic CGE model with heterogeneous capital. Resource and Energy Economics, 33(4), 963-980.
  • Bretschger, L, F. Lechthaler, S. Rausch and L. Zhang (2017): Knowledge diffusion, endogenous growth and the costs of global climate policy. European Economic Review, 93, 47-72.

Recent application

  • Bretschger, L. and L. Zhang (2017): Nuclear phase-out under stringent climate policies: A dynamic macroeconomic analysis. The Energy Journal, 38(1), 167-194.
  • Bretschger, L., Ramer, R., and Zhang, L. (2012): Economic effects of a nuclear phase-out policy: A CGE analysis. Economics Working Paper Series 12/167, ETH Zurich.

Data sources

  • GTAP. Narayanan, G., A. Badri, and R. McDougall, ed. 2012. Global Trade, Assistance, and Production: The GTAP 8 Data Base. Center for Global Trade Analysis, Purdue University.
  • OECD, OECD Patent Database.
  • Paltsev, S., J.M. Reilly, H.D. Jacoby, R.S. Eckaus, J. McFarland, M. Sarofim, M. Asadoorian and M. Babiker, 2005. The MIT Emissions Prediction and Policy Analysis (EPPA) Model: Version 4, MIT Joint Program on the Science and Policy of Global Change Report 125, Cambridge, MA.
  • PATSTAT, European Patent Office (EPO), Worldwide Patent Statistical Database (PATSTAT).
  • Swiss Federal Office of Energy. Peter M., van Nieuwkoop R., Nathani C., Sutter D., Kraner S.(2013): "Energy related disaggregation of the Swiss IOT 2008 and revision of energy-IOT 2001 and 2005", EWG Publication 290843, Bern.
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