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The cModel is a computation tool to simulate the global economy with 170 industries and 43 countries plus the rest of the world at the stroke of a button. It is implemented in Julia.

The cModel is based on the Ricardian trade framework of Eaton and Kortum (2002) , with competitive global markets for goods and services and with competitive local factor markets for labor and capital. Goods and services enter production as intermediate goods in addition to their final uses by households and government. In each industry and country, producers combine local labor and capital with globally sourced intermediate inputs and offer a set of varieties. An active government in each country collects revenues from taxes and tariffs, while government expenditure goes to subsidies and procurement. Producers, households and governments globally source varieties within industries from the least costly producers. The simulation algorithm, implemented in Julia, calls equilibrium convergence for mutually consistent producer, household and government decisions and budgets. We take each country's observed net exports or imports (a trade surplus or deficit) as exogenous.

From the ITPD-E data by the United States International Trade Commission, we obtain production and trade for 170 supply industries in the benchmark year 2016, including services trade. To account for the input-ouput relationships across countries and activities, we use WIOD data by Timmer et al. (2015) for the year 2014, extracting shares of supply industries by source country in use industries by destination (under Cobb-Douglas production) as well as expenditure shares of supply industries in (Cobb-Douglas) household and government consumption. Using shares of supply industries within use industries preserves positive value added by use industry but can result in negative inventory change for data consistency. We apply the Wolsky (1984) disaggregation to infer a consistent input-output structure for the 170 ITPD-E industries that map into 38 matching aggregates of the 56 sectoral activities in WIOD. We consider 43 countries plus an aggregate of the rest of the world for mutual consistency between ITPD-E and WIOD. The combined data allow us to infer all shares in production, consumption and procurement. To calibrate elasticities, including industry-specific trade elasticities that measure the responsiveness of trade flows to goods and services prices, we use WITS tariff data for goods and an average tariff to approximate services trade barriers in gravity equations (Head and Meyer 2014) .

cModel Report (PDF)