Preferential Trade Liberalisation, Fiscal Policy Responses and Welfare: A Dynamic CGE Model for Jordan
AbstractThis paper aims at assessing the effects on the Jordanian economy of the Association Agreement (AA) between Jordan and the European Union (EU). Particular emphasis is placed on the effects on consumer welfare. The EU-Jordan AA was signed in 1997 and entered into force in May 2002. It eliminates progressively tariffs on most industrial goods imported by Jordan from the EU. Custom duties on agricultural goods and processed agricultural products are gradually and only partially eliminated. Trade liberalisation is expected to bring about a positive impact on consumer welfare through lower prices of investment and consumption goods. On the other hand, it reduces government revenue due to foregone tariff revenue. Therefore counteracting fiscal measures are required in order to offset the loss in government revenue. Therefore counteracting fiscal measures are required in order to offset the loss in government revenue. In order to capture intertemporal effects brought about by trade liberalisation on the Jordanian economy, a multisectoral dynamic CGE model is specified and calibrated. Simulation results show that the implementation of the AA raises consumer welfare in Jordan and has positive effects on all macroeconomic variables in the long-run, but it reduces consumption in the short-run.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.
Volume (Year): 227 (2007)
Issue (Month): 4 (August)
Contact details of provider:
Postal: Licher Straße 74, 35394 Gießen
Phone: +49 (0)641 99 22 001
Fax: +49 (0)641 99 22 009
Web page: http://wiwi.uni-giessen.de/home/oekonometrie/Jahrbuecher/
More information through EDIRC
Dynamic computable general equilibrium; Jordan; trade liberalisation;
Find related papers by JEL classification:
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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.:
- Timo Trimborn & Karl-Josef Koch & Thomas M. Steger, 2004.
"Multi-dimensional transitional dynamics : a simple numerical procedure,"
CER-ETH Economics working paper series
04/35, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Trimborn, Timo & Koch, Karl-Josef & Steger, Thomas M., 2008. "Multidimensional Transitional Dynamics: A Simple Numerical Procedure," Macroeconomic Dynamics, Cambridge University Press, vol. 12(03), pages 301-319, June.
- Karl-Josef Koch & Timo Trimborn & Thomas M. Steger, 2005. "Multi-Dimensional Transitional Dynamics: A Simple Numerical Procedure," Volkswirtschaftliche DiskussionsbeitrÃ¤ge 121-05, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
- Timo Trimborn & Karl-Josef Koch & Thomas Steger, 2006. "Multi-Dimensional Transitional Dynamics: A Simple Numberical Procedure," CESifo Working Paper Series 1745, CESifo Group Munich.
- Hoekman, Bernard & Djankov, Simeon, 1997.
"Effective protection and investment incentives in Egypt and Jordan during the transition to free trade With Europe,"
Elsevier, vol. 25(2), pages 281-291, February.
- Djankov, Simeon & Hoekman, Bernard, 1996. "Effective Protection and Investment Incentives in Egypt and Jordan During the Transition to Free Trade with Europe," CEPR Discussion Papers 1415, C.E.P.R. Discussion Papers.
- Devarajan, Shantayanan & Go, Delfin S., 1998. "The Simplest Dynamic General-Equilibrium Model of an Open Economy," Journal of Policy Modeling, Elsevier, vol. 20(6), pages 677-714, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Winker).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.