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The application of spatial models in the analysis of bilateral trade flows: An alternative to the Armington approach for the world sugar market

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Author Info
Nolte, Stephan
Abstract

This paper suggests spatial models as an alternative to the Armington approach to model bilateral trade. While the use of spatial models has been accepted for decades, they are rarely chosen for such analyses. However, problems inherent in the application of the Armington approach can be overcome through the use of spatial models. To demonstrate, a simple spatial model of the world sugar market is built and used to simulate a multilateral liberalization scenario. Additionally, an identical model is constructed, applying the Armington approach. The results of the spatial model of the sugar market are found to be more plausible than those generated by the Armington-based model.

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Paper provided by Humboldt University Berlin, Institute for Agricultural Economic and Social Sciences in its series Working Paper Series with number 10288.

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Date of creation: 2006
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Handle: RePEc:ags:huiawp:10288

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Related research
Keywords: bilateral trade; trade preferences; partial equilibrium models; Armington approach; sugar; International Relations/Trade; F11; F15; C69;

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  1. Weber, Gerald, 2003. "Internationaler Handel und multifunktionale Landwirtschaft : Ein Agrarsektormodell zur Analyse Politischer Optionen und Entscheidungsunterstutzung," Working Paper Series 18824, Humboldt University Berlin, Institute for Agricultural Economic and Social Sciences. [Downloadable!]
  2. Leena Kerkelä & Ellen Huan-Niemi, 2005. "Trade Preferences in the EU Sugar Sector: Winners and Losers," Discussion Papers 358, Government Institute for Economic Research Finland (VATT). [Downloadable!]
  3. Grethe, Harald, 2004. "Turkey's Accession to the EU: What Will the Common Agricultural Policy Cost?," Working Paper Series 18821, Humboldt University Berlin, Institute for Agricultural Economic and Social Sciences. [Downloadable!]
  4. Musshoff, Oliver & Hirschauer, Norbert & Palmer, Ken, 2002. "Bounded Recursive Stochastic Simulation - A Simple and Efficient Method for Pricing Complex American Type Options," Working Paper Series 18823, Humboldt University Berlin, Institute for Agricultural Economic and Social Sciences. [Downloadable!]
  5. Gohin, Alexandre & Bureau, Jean-Christophe, 2005. "Sugar Market Liberalization: Modeling the EU Supply of "C" Sugar," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24740, European Association of Agricultural Economists. [Downloadable!]
  6. Arbenser, Lawrence, 2004. "A General Equilibrium Analysis of the Impact of Inward FDI on Ghana: The Role of Complementary Policies," Working Paper Series 18829, Humboldt University Berlin, Institute for Agricultural Economic and Social Sciences. [Downloadable!]
  7. Dr. Peter Kenning & Hilke Plassmann, 2004. "NeuroEconomics," Experimental 0412005, EconWPA. [Downloadable!]
  8. Odening, Martin, 2000. "Der Optionswert von Sachinvestitionen - Theoretischer Hintergrund und Bewertungsmethoden," Working Paper Series 18828, Humboldt University Berlin, Institute for Agricultural Economic and Social Sciences. [Downloadable!]
  9. van Berkum, S. & Roza, P. & van Tongeren, F.W., 2005. "Impacts of the EU sugar policy reforms on developing countries," Report Series 29139, Agricultural Economics Research Institute. [Downloadable!]
  10. Lissitsa, Alexej & Odening, Martin, 2001. "Effizienz und totale Faktor-produktivitat in der ukrainischen Landwirtschaft im Transformationsprozess," Working Paper Series 7391, Humboldt University Berlin, Institute for Agricultural Economic and Social Sciences. [Downloadable!]
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