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Imperfect Competition, Economies of Scale and Trade Liberalisation in Tunisia - A Comparative Analysis Using a Computable General Equilibrium Model (CGEM)


  • Ferjani, Ali


Within a multi-sectoral general equilibrium framework, we explicitly model either competitive or Cournot oligopolistic commodities market structures. The model is used to assess the impact of trade liberalization on Tunisia economy. We show that the results are different from those obtained with perfect competition in terms of sectors allocations, but also mainly in terms of welfare. It is found that the trade liberalization improves welfare in all cases, and these gains are the most important with oligopoly. The existence of imperfection competition will be beneficial if the local producers profit from trade liberalization to decrease their production prices and to increase their production level. The outcome shows that the traditionally export-oriented sectors will cope with the liberalisation without any problems. In opposition the sectors that are usually more protected against foreign competition like the agricultural sector will suffer. The most unfortunate effects refer to public budget equilibrium. The fiscal reform proves to be an important element of every complementary domestic policy of the commercial liberalization.

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  • Ferjani, Ali, 2003. "Imperfect Competition, Economies of Scale and Trade Liberalisation in Tunisia - A Comparative Analysis Using a Computable General Equilibrium Model (CGEM)," Agrarwirtschaft und Agrarsoziologie/ Economie et Sociologie Rurales, Swiss Society for Agricultural Economics and Rural Sociology, issue 1.
  • Handle: RePEc:ags:agrarw:31998

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    1. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2009. "Some Economic Effects of the Free Trade Agreement between Tunisia and the European Union," World Scientific Book Chapters,in: Globalization And International Trade Policies, chapter 11, pages 343-392 World Scientific Publishing Co. Pte. Ltd..
    2. de Melo, Jaime, 1988. "Computable general equilibrium models for trade policy analysis in developing countries: A survey," Journal of Policy Modeling, Elsevier, vol. 10(4), pages 469-503.
    3. Markusen, James R. & Venables, Anthony J., 2000. "The theory of endowment, intra-industry and multi-national trade," Journal of International Economics, Elsevier, vol. 52(2), pages 209-234, December.
    4. Mercenier, J., 1992. "Completing the European Internal Market: a General Equilibrium Evaluation Under Alternative Market Structure Assumption," Cahiers de recherche 9208, Universite de Montreal, Departement de sciences economiques.
    5. Devarajan, Shantayanan & Rodrik, Dani, 1991. "Pro-competitive effects of trade reform : Results from a CGE model of Cameroon," European Economic Review, Elsevier, vol. 35(5), pages 1157-1184, July.
    6. Jaime de Melo & David Roland-Holst, 2015. "Industrial Organization and Trade Liberalization: Evidence from Korea," World Scientific Book Chapters,in: Modeling Developing Countries' Policies in General Equilibrium, chapter 18, pages 385-404 World Scientific Publishing Co. Pte. Ltd..
    7. Smith, Alasdair & Venables, Anthony J., 1988. "Completing the internal market in the European Community : Some industry simulations," European Economic Review, Elsevier, vol. 32(7), pages 1501-1525, September.
    8. Jaime De Melo & Arvind Panagariya & Dani Rodrik, 2015. "The New Regionalism: A Country Perspective," World Scientific Book Chapters,in: Developing Countries in the World Economy, chapter 14, pages 323-357 World Scientific Publishing Co. Pte. Ltd..
    9. repec:wsi:wschap:9789813108448_0016 is not listed on IDEAS
    10. Glenn W. Harrison & Thomas F. Rutherford & David G. Tarr, 2017. "Quantifying The Uruguay Round," World Scientific Book Chapters,in: Trade Policies for Development and Transition, chapter 16, pages 363-388 World Scientific Publishing Co. Pte. Ltd..
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