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Spatial Equilibrium With Intermediate Products: Implementation And Validation In The Mercosur

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Author Info
Paulo D. WAQUIL
Thomas L. COX ()
Abstract

This paper develops the formulation of a spatial equilibrium model with intermediate products. The presence of intermediate products brings a better representation of the real world, accounting for the technological relationships among commodities in the several stages of production. Instead of the usual assumption of constant costs of transformation, positively sloped cost of transformation functions are assumed, reflecting increasing marginal costs of transformation. The model is implemented and validated in the analysis of the optimal allocation and pricing of animal products, grains and oilseeds in the MERCOSUR.

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Paper provided by University of Wisconsin Madison, AAE in its series Staff Papers with number 388.

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Date of creation: Dec 1995
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Handle: RePEc:wop:wiaesp:388

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Postal: University of Wisconsin, Dept. of Agricultural and Applied Economics, 427 Lorch Street, Madison, WI 53706
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