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An Economic Derivation on Trade Coefficients under the Framework of Multi-regional I-O Analysis

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  • Meng, Bo
  • Ando, Asao
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Abstract

The 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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File URL: http://ir.ide.go.jp/dspace/bitstream/2344/176/3/ARRIDE_Discussion_No.29_meng.pdf
File Function: First version, 2005
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Bibliographic Info

Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 29.

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Date of creation: May 2005
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Publication status: Published in IDE Discussion Paper. No. 29. 2005.5
Handle: RePEc:jet:dpaper:dpaper29

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Related research

Keywords: Trade coefficients; Multi-regional; Input-output tables; Armington assumption; Regional economic cooperation; Trade problem;

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Cited by:
  1. Ando, Asao & Meng, Bo, 2014. "Spatial price equilibrium and the transport sector : a trade-consistent SCGE model," IDE Discussion Papers 447, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  2. 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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