The Macroeconomic, Industrial and Distributional Effects of Removing Tariffs in Bangladesh
AbstractThis paper examines the economic effects of removing tariffs in Bangladesh using a computable general equilibrium (CGE) modelling approach. The results of the simulations indicate that in the short-run a funded tariff cut with fixed real national savings would increase employment slightly and hence would expand GDP. There would be a small economy-wide welfare gain as measured by real consumption. The sectoral results showed that export-oriented industries would experience an expansion in output and employment. There also would be positive effects on the suppliers to these industries. Lightly-protected industries, which rely heavily on imported intermediate inputs, are projected to show robust expansion as they would benefit from a cost reduction. However, highly-protected, import-competing industries would suffer a contraction in output and employment as they would face increased competition from imports due to the removal of tariffs. The simulation results also indicate that there would have some noticeable effects on the distribution of real consumption between different household groups. Overall, urban households would experience an expansion in real consumption and rural households would suffer a contraction as a consequence of the funded tariff cut with fixed real national savings.
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.
Bibliographic InfoPaper provided by Victoria University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-170.
Date of creation: Jan 2008
Date of revision:
CGE model; trade liberalisation; income distribution; Bangladesh;
Other versions of this item:
- Hoque, Serajul, 2008. "The macroeconomic, industrial and distributional effects of removing tariffs in Bangladesh," MPRA Paper 9577, University Library of Munich, Germany.
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-12 (All new papers)
- NEP-CMP-2008-01-12 (Computational Economics)
- NEP-CWA-2008-01-12 (Central & Western Asia)
- NEP-DEV-2008-01-12 (Development)
- NEP-INT-2008-01-12 (International Trade)
- NEP-MAC-2008-01-12 (Macroeconomics)
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.:
- Decaluwe, Bernard & Martens, Andre, 1988.
"CGE modeling and developing economies: A concise empirical survey of 73 applications to 26 countries,"
Journal of Policy Modeling,
Elsevier, vol. 10(4), pages 529-568.
- Decaluwe, B. & Martens, A., 1988. "Cge Modeling And Developing Economies: A Concise Empirical Survey Of 73 Applications To 26 Countries," Papers 8816, Laval - Recherche en Politique Economique.
- Fontana, Marzia & Wobst, Peter & Dorosh, Paul A., 2001. "Macro policies and the food sector in Bangladesh," TMD discussion papers 73, International Food Policy Research Institute (IFPRI).
- Bandara, Jayatilleke S, 1991. " Computable General Equilibrium Models for Development Policy Analysis in LDCs," Journal of Economic Surveys, Wiley Blackwell, vol. 5(1), pages 3-69.
- David Dollar & Aart Kraay, 2004.
"Trade, Growth, and Poverty,"
Royal Economic Society, vol. 114(493), pages F22-F49, 02.
- Peter B. Dixon & Maureen T. Rimmer & Marinos E. Tsigas, 2004. "Macro, industry and state effects in the U.S. of removing major tariffs and quotas," Centre of Policy Studies/IMPACT Centre Working Papers g-146, Victoria University, Centre of Policy Studies/IMPACT Centre.
- Nabil Annabi & H. Khondker Bazlul & Selim Raihan & John Cockburn & Bernard Decaluwe, 2005. "Implications of WTO Agreements and Domestic Trade Policy Reforms for Poverty in Bangladesh: Short vs. Long Run," Working Papers MPIA 2005-02, PEP-MPIA.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Horridge).
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.