Spatial aspects of trade liberalization in Colombia: A general equilibrium approach
AbstractThis paper offers some preliminary steps in the marriage of some of the theoretical foundations of new economic geography with spatial computable general equilibrium models. Modelling the spatial economy of Colombia using the traditional assumptions of computable general equilibrium (CGE) models makes little sense when one territorial unit, Bogotá, accounts for over one quarter of GDP and where transportation costs are high and accessibility low compared to European or North American standards. Hence, handling market imperfections becomes imperative as does the need to address internal spatial issues from the perspective of Colombia's increasing involvement with external markets. The paper builds on the Centro de Estudios de Economia Regional (CEER) model, a spatial CGE model of the Colombian economy; non-constant returns and non-iceberg transportation costs are introduced and some simulation exercises carried out. The results confirm the asymmetric impacts that trade liberalization has on a spatial economy in which one region, Bogotá, is able to more fully exploit scale economies "vis-à-vis" the rest of Colombia. The analysis also reveals the importance of different hypotheses on factor mobility and the role of price effects to better understand the consequences of trade opening in a developing economy. Copyright (c) 2009 the author(s). Journal compilation (c) 2009 RSAI.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Papers in Regional Science.
Volume (Year): 88 (2009)
Issue (Month): 4 (November)
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Other versions of this item:
- Eduardo Haddad & Jaime Bonet Moron & Geoffrey Hewings & Fernando Perobelli, 2008. "Spatial Aspects of Trade Liberalization in Colombia:A General Equilibrium Approach," BORRADORES DE ECONOMIA 004690, BANCO DE LA REPÚBLICA.
- Eduardo A. Haddad & Jaime Bonet & Geoffrey. J.D.Hewings & Fernando S Perobelli, . "Spatial Aspects of Trade Liberalization in Colombia: A General Equilibrium Approach," Borradores de Economia 515, Banco de la Republica de Colombia.
- Eff - Macroeconomics and Monetary Economics - - - - -
- gai - - - - - -
- Cla - Mathematical and Quantitative Methods - - - - -
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