Dynamic effects of tariff liberalization: An intertemporal CGE approach
AbstractThe paper presents a multisectoral CGE model with overlapping generations in which intertemporal optimization by households and firms determines savings and investment under perfect foresight. We calibrate the model to Austrian data and simulate a unilateral tariff liberalization scenario. We find that unilateral tariff reductions are expansionary in the long-run but involve considerable diversity in sectoral adjustment. Foreign debt increases in the long-run, causing an improvement in the trade balance. In terms of welfare, some old generations gain at the expense of young and future generations. Budgetary policies are shown to be crucial for several effects. Copyright 1995 by Blackwell Publishing Ltd.
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Bibliographic InfoPaper provided by University of Bonn, Germany in its series Discussion Paper Serie A with number 386.
Date of creation: Dec 1992
Date of revision:
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CGE trade model; tariff-reductions; tariff-liberalization; Savings; Investment;
Other versions of this item:
- Keuschnigg, Christian & Kohler, Wilhelm, 1995. "Dynamic Effects of Tariff Liberalization: An Intertemporal CGE Approach," Review of International Economics, Wiley Blackwell, vol. 3(1), pages 20-35, February.
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
- F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
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