The impact of tariff reduction on Bangladesh economy: a computable general equilibrium assessment
AbstractThis paper explores the effects of tariff reduction on macroeconomic indicators and sectoral output in Bangladesh using a computable general equilibrium approach. The simulation results indicate that a reduction in all tariffs expands gross domestic product and generates employment, which suggests that tariff cuts have a short-run stimulatory effect on economic growth. The industries that experience the greatest positive effects on their output and employment are export-oriented industries. There are also positive effects on the suppliers to these industries. Lightly-protected industries that rely heavily on imported intermediate inputs exhibit robust expansion, benefiting from a cost reduction as a result of the removal of protection. However, highly-protected, import-competing industries suffer a contraction in output and employment as they face increased competition from imports due to the liberalisation of trade.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 16246.
Date of creation: May 2005
Date of revision:
Trade liberalisation; computable general equilibrium model; Bangladesh;
Find related papers by JEL classification:
- 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
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- Dollar, David & Kraay, Aart, 2001.
"Trade, growth, and poverty,"
Policy Research Working Paper Series
2615, The World Bank.
- Mukhopadhyay, Ujjaini & Chaudhuri, Sarbajit, 2011. "Economic liberalization, gender wage inequality and welfare – a theoretical analysis," MPRA Paper 32954, University Library of Munich, Germany.
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