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General Equilibrium Analysis of Strategic Trade: A Computable General Equilibrium Model for India

Author

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  • Koushik Das

    (Koushik Das, Assistant Professor, Department of Economics, Chandias Mahavidyalaya, affiliated to Burdwan University, West Bengal, India. E-mail: koushik10in2001@gmail.com)

  • Pinaki Chakraborti

    (Pinaki Chakraborti, Professor, Department of Economics, Burdwan University, West Bengal, India. E-mail: c.pinaki@gmail.com)

Abstract

Strategic trade refers to international trade under market imperfections. The purpose of the article is to comprehend general equilibrium implications of trade liberalization on Indian macroeconomic aspects under alternative market structures. We applied computable general equilibrium (CGE) modelling as our relevant methodology following Shoven and Whalley, ( 1984 ). Constructing a four sector social accounting matrix (SAM) for India, the article attempts to purport the effects of liberalized trade over different macroeconomic aspects under monopolistic competition and compared the results with the same obtained under benchmark perfect competition scenario. Our study reveals that trade under imperfect competition could not produce any greater domestic output, expansion of trade in terms of volume of export and import and gains from trade as compared to standard perfect competition scenario.

Suggested Citation

  • Koushik Das & Pinaki Chakraborti, 2014. "General Equilibrium Analysis of Strategic Trade: A Computable General Equilibrium Model for India," IIM Kozhikode Society & Management Review, , vol. 3(2), pages 165-181, July.
  • Handle: RePEc:sae:iimkoz:v:3:y:2014:i:2:p:165-181
    DOI: 10.1177/2277975214542060
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    References listed on IDEAS

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