An Economic Derivation on Trade Coefficients under the Framework of Multi-regional I-O Analysis
AbstractThe gravity model, entropy model, potential type model and others like these have been adopted to formulate interregional trade coefficients under the framework of Multi-Regional I-O (MRIO) analysis. Since most of these models are based upon analogies in physics or on statistical principles, they do not provide a theoretical explanation from the view of a firm's or individual's rational and deterministic decision making. In this paper, according to the deterministic choice theory, not only is an alternative formulation of the trade coefficients presented, but also a discussion of an appropriate definition for purchasing prices indices. Since this formulation is consistent with the MRIO system, it can be employed as a useful model-building tool in multi-regional models such as the spatial CGE model.
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Bibliographic InfoPaper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 29.
Date of creation: May 2005
Date of revision:
Publication status: Published in IDE Discussion Paper. No. 29. 2005.5
Postal: Publication Office, IDE 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545 JAPAN
Find related papers by JEL classification:
- C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-03 (All new papers)
- NEP-GEO-2007-02-03 (Economic Geography)
- NEP-INT-2007-02-03 (International Trade)
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- Ando, Asao & Meng, Bo & Chao, Qu, 2009. "Trade Coefficients and the Role of Elasticity in a Spatial CGE Model Based on the Armington Assumption," IDE Discussion Papers 204, Institute of Developing Economies, Japan External Trade Organization(JETRO).
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