Modelling the World Wool Market: A Hybrid Approach
AbstractWe present a model of the world wool market that merges two modelling traditions: the partialequilibrium commodity-specific approach and the computable general-equilibrium approach. The model captures the multistage nature of the wool production system, and the heterogeneous nature of raw wool, processed wool and wool garments. It also captures the important wool producing and consuming regions of the world. We illustrate the utility of the model by estimating the effects of tariff barriers on wool products using partial- and general-equilibrium solutions. We find that either solution generates similar wool industry results, whereas the macroeconomic effects differ significantly with the partial-equilibrium estimates significantly overestimating the benefits of the tariff changes.
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Bibliographic InfoPaper provided by The University of Western Australia, Department of Economics in its series Economics Discussion / Working Papers with number 07-18.
Length: 26 pages
Date of creation: 2007
Date of revision:
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More information through EDIRC
general equilibrium; multistage production; partial equilibrium; tariffs; wool products.;
Other versions of this item:
- Verikios, George, 2009. "Modelling the world wool market: A hybrid approach," Economic Modelling, Elsevier, vol. 26(2), pages 418-431, March.
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