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Global Trade Models and Economic Policy Analyses: Relevance, Risks and Repercussions for Africa

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Hakim Ben Hammouda
Patrick N. Osakwe

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Abstract

Computable general equilibrium models are widely used for trade policy analyses and recommendations. There is, however, increasing discomfort with the use of these models, especially in Africa. This article demonstrates that the results of several such studies of the impact of trade reforms in Africa differ drastically in terms of both magnitude and direction, failing to take account of key features of African economies. It also outlines potential consequences of the misuse of CGE models for policy evaluation and suggests pitfalls to be avoided. Copyright (c) The Authors 2008. Journal compilation (c) 2008 Overseas Development Institute..

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Article provided by Overseas Development Institute in its journal Development Policy Review.

Volume (Year): 26 (2008)
Issue (Month): 2 (03)
Pages: 151-170
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Handle: RePEc:bla:devpol:v:26:y:2008:i:2:p:151-170

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Tom Achterbosch & Hakim Ben Hammouda & Patrick Osakwe & Frank van Tongeren, 2004. "Trade liberalisation under the Doha Development Agenda Options and consequences for Africa," International Trade 0407013, EconWPA. [Downloadable!]
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  2. Swamy, Anand V., 1997. "A simple test of the nutrition-based efficiency wage model," Journal of Development Economics, Elsevier, vol. 53(1), pages 85-98, June. [Downloadable!] (restricted)
  3. Francois, Joseph, 1998. "Scale Economies and Imperfect Competition in the GTAP Model," GTAP Technical Papers 317, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University. [Downloadable!]
  4. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005. "Would multilateral trade reform benefit Sub-Saharan Africans?," Policy Research Working Paper Series 3616, The World Bank. [Downloadable!]
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  5. Barbara J. Spencer & James A. Brander, 1982. "Tariff Protection and Imperfect Competition," Working Papers 517, Queen's University, Department of Economics.
  6. Valenzuela, Ernesto & Hertel, Thomas & Keeney, Roman & Reimer, Jeff, 2005. "Assessing Global CGE Model Validity Using Agricultural Price Volatility," GTAP Working Papers 1875, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University. [Downloadable!]
  7. Emran, M. Shahe & Stiglitz, Joseph E., 2005. "On selective indirect tax reform in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 599-623, April. [Downloadable!] (restricted)
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  8. Thomas Baunsgaard & Michael Keen, 2005. "Tax Revenue and (or?) Trade Liberalization," IMF Working Papers 05/112, International Monetary Fund. [Downloadable!]
  9. McKitrick, Ross R., 1998. "The econometric critique of computable general equilibrium modeling: the role of functional forms," Economic Modelling, Elsevier, vol. 15(4), pages 543-573, October. [Downloadable!] (restricted)
  10. Antoine Bouet & Jean-Christophe Bureau & Yvan Decreux & Sebastien Jean, 2004. "Multilateral Agricultural Trade Liberalization: The Contrasting Fortunes of Developing Countries in the Doha Round," Working Papers 2004-18, CEPII research center. [Downloadable!]
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  11. Timothy J. Kehoe, 2003. "An Evaluation of the Performance of Applied General Equilibrium Models of the Impact of NAFTA," Levine's Bibliography 506439000000000525, UCLA Department of Economics. [Downloadable!]
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  12. Diao, Xinshen & Diaz-Bonilla, Eugenio & Robinson, Sherman & Orden, David, 2005. "Tell me where it hurts, an' I'll tell you who to call," MTID discussion papers 84, International Food Policy Research Institute (IFPRI). [Downloadable!]
  13. Liu, Jing & Channing Arndt & Thomas Hertel, 2003. "Parameter Estimation and Measures of Fit in A Global, General Equilibrium Model," GTAP Working Papers 1200, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University. [Downloadable!]
  14. Angus Deaton, 1999. "Commodity Prices and Growth in Africa," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 23-40, Summer. [Downloadable!] (restricted)
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  15. Eswaran, Mukesh & Kotwal, Ashok, 1990. "Implications of Credit Constraints for Risk Behaviour in Less Developed Economies," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 473-82, April. [Downloadable!] (restricted)
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  1. Cernat, Lucian & Onguglo, Bonapas & Ito, Taisuke, 2007. "RTAs and WTO compatibility: Catch me if you can? The case of EPA negotiations," MPRA Paper 3645, University Library of Munich, Germany. [Downloadable!]
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