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Consistent Trade Policy Aggregation

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  • James E. Anderson

Abstract

Most empirical policy work requires the aggregation of policies. Trade policy aggregation exemplifies the aggregation problem poignantly, with thousands of highly dispersed trade barriers. This paper provides methods of policy aggregation that are consistent with two common objectives of empirical work. One is to preserve real income. The other is to preserve the real volume of activity in the parts of the economy being aggregated. Both objectives must be achieved for consistent multi-country policy modeling. An application to India shows that the standard atheoretic method of aggregation overstates India's real income by around 3 times the global gains from free trade.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14046.

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Date of creation: May 2008
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Publication status: published as James E. Anderson, 2009. "Consistent Trade Policy Aggregation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(3), pages 903-927, 08.
Handle: RePEc:nbr:nberwo:14046

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  1. James E. Anderson & J. Peter Neary, 2005. "Measuring the Restrictiveness of International Trade Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012200, December.
  2. Lawrence H. Goulder & Roberton C. Williams III, 2003. "The Substantial Bias from Ignoring General Equilibrium Effects in Estimating Excess Burden, and a Practical Solution," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 111(4), pages 898-927, August.
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Cited by:
  1. Martin, William J. & Anderson, Kym, 2006. "The Doha Agenda and Agricultural Trade Reform: The Role of Economic Analysis," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia, International Association of Agricultural Economists 25628, International Association of Agricultural Economists.
  2. Berisha-Krasniqi, Valdete & Bouet, Antoine & Estrades, Carmen & Laborde, David, 2011. "Trade and investment in Latin America and Asia: Lessons from the past and potential perspectives from further integration," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 1060, International Food Policy Research Institute (IFPRI).
  3. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2012. "Estimating effects of price-distorting policies using alternative distortions databases," CEPR Discussion Papers, C.E.P.R. Discussion Papers 9083, C.E.P.R. Discussion Papers.
  4. Narayanan, Badri & Hertel, Thomas & Horridge, Mark, 2009. "Disaggregated Data and Trade Policy Analysis: The Value of Linking Partial and General Equilibrium Models," GTAP Working Papers 3162, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  5. Antoine Bouet & Valdete Berisha-Krasniqui & Valdete Berisha-Krasniqui & Carmen Estrades & David Laborde, 2011. "Trade and investment in Latin America and Asia : Potential perspectives from further integration," Larefi Working Papers, Larefi, Université Bordeaux 4 1101, Larefi, Université Bordeaux 4.
  6. Bouët, Antoine & Berisha-Krasniqi, Valdete & Estrades, Carmen & Laborde, David, 2012. "Trade and investment in Latin America and Asia: Perspectives from further integration," Journal of Policy Modeling, Elsevier, Elsevier, vol. 34(2), pages 193-210.
  7. van der Mensbrugghe, Dominique, 2013. "Modeling the Global Economy – Forward-Looking Scenarios for Agriculture," Handbook of Computable General Equilibrium Modeling, Elsevier.
  8. repec:laf:wpaper:201101 is not listed on IDEAS

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