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Regional policy and the role of interregional trade data: policy simulations with a model for Norway

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  • Ulf Johansen
  • Ruud Egging
  • Olga Ivanova

Abstract

Point data observations are often used to calibrate computable general equilibrium (CGE) models; however, results may be impacted by calibration of an Armington trade specification in a regional CGE (R-CGE) model. This paper calibrates an Armington trade specification with three differently estimated interregional trade data sets. It estimates interregional trade with one survey and two non-survey methods. The resulting three different trade data sets are each used to calibrate REMES, an R-CGE model for Norway. Two regional policy reforms are simulated with the three model versions to analyze the sensitivity of regional manufacturing sector output to trade data estimates. The results show that the trade data estimation method used for calibration significantly affects regional sector output results. Policy analysts and developers should be aware that calibrating an Armington trade specification with differently estimated interregional trade data may have a substantial influence on model results, and hence, on ex-ante and ex-post conclusions on policy impacts.

Suggested Citation

  • Ulf Johansen & Ruud Egging & Olga Ivanova, 2018. "Regional policy and the role of interregional trade data: policy simulations with a model for Norway," Regional Studies, Regional Science, Taylor & Francis Journals, vol. 5(1), pages 312-331, January.
    • Handle: RePEc:taf:rsrsxx:v:5:y:2018:i:1:p:312-331
    DOI: 10.1080/21681376.2018.1522967
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    Cited by:

    1. Luyuan Xu & Wei Wang, 2021. "A Quantitative Relationship Analysis of Industry Shifts and Trade Restructuring in ASEAN Based on Multiregional Computable General Equilibrium Models," Complexity, Hindawi, vol. 2021, pages 1-12, February.
    2. Mattia Cai, 2021. "Doubly constrained gravity models for interregional trade estimation," Papers in Regional Science, Wiley Blackwell, vol. 100(2), pages 455-474, April.

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