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Impacts of Trade Reform: Sensitivity of Model Results to Key Assumptions

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  • Ernesto Valenzuela

    () (School of Economics, University of Adelaide)

  • Kym Anderson

    () (School of Economics, University of Adelaide)

  • Thomas Hertel

    () (Department of Agricultural Economics, Purdue University)

Abstract

The WTOÂ’s Doha Development Agenda has generated demand for estimates of the potential economic consequences of global trade reform. Recent improvements in the GTAP dataset have provided a much better representation of tariff restrictions as of 2001. However, despite its use by most global trade modelers, substantial differences in results emerge from different computable general equilibrium exercises. To help understand these differences, this paper examines the sensitivity of full global and regional trade liberalization results from the GTAP model, using the GTAP version 6.1 database, to different assumptions about factor mobility, fiscal neutrality, macro-economic closure, and trade (Armington) elasticities.

Suggested Citation

  • Ernesto Valenzuela & Kym Anderson & Thomas Hertel, 2007. "Impacts of Trade Reform: Sensitivity of Model Results to Key Assumptions," Centre for International Economic Studies Working Papers 2007-09, University of Adelaide, Centre for International Economic Studies.
    • Handle: RePEc:adl:cieswp:2007-09
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    References listed on IDEAS

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    1. Will Martin & Kym Anderson, 2006. "Agricultural Trade Reform and the Doha Development Agenda," World Bank Publications, The World Bank, number 6889, November.
    2. Kym Anderson & Will Martin & Dominique van der Mensbrugghe, 2006. "Distortions to World Trade: Impacts on Agricultural Markets and Farm Incomes," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(2), pages 168-194.
    3. Kym Anderson & Will Martin & Dominique van der Mensbrugghe, 2006. "Would Multilateral Trade Reform Benefit Sub-Saharan Africans?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(4), pages 626-670, December.
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    Cited by:

    1. Regmi, Anita & Seale, James L., Jr., 2010. "Cross-Price Elasticities of Demand Across 114 Countries," Technical Bulletins 59870, United States Department of Agriculture, Economic Research Service.
    2. Meade, Birgit & Muhammad, Andrew, 2014. "New International Evidence on Food Consumption Patterns: A Focus on Cross-Price Effects Based on 2005 International Comparison Program Data," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, issue Issue 03, pages 1-1, April.
    3. Dorothee Flaig & Harald Grethe & Scott McDonald & Khalid Siddig, 2012. "Intersectoral factor movements: do adjustment costs matter for welfare?," EcoMod2012 4418, EcoMod.
    4. James Scott & Rorden Wilkinson, 2012. "Changing of the guard: expert knowledge and ‘common sense’ in the Doha Development Agenda," Global Development Institute Working Paper Series 16612, GDI, The University of Manchester.
    5. Németh, Gabriella & Szabó, László & Ciscar, Juan-Carlos, 2011. "Estimation of Armington elasticities in a CGE economy-energy-environment model for Europe," Economic Modelling, Elsevier, vol. 28(4), pages 1993-1999, July.
    6. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2013. "Estimating Effects of Price-Distorting Policies Using Alternative Distortions Databases," Handbook of Computable General Equilibrium Modeling, Elsevier.
    7. Jean-Christophe Bureau & Sébastien Jean, 2013. "International Agricultural Trade and Negotiations : Coping with a New Landscape
      [Commerce et négociations agricoles commerciales: s'ajuster au nouvel environnement]      ," Working Papers hal-01592099, HAL.
    8. Morey, Mitchell, 2016. "Preferences and the home bias in trade," Journal of Development Economics, Elsevier, vol. 121(C), pages 24-37.
    9. James Scott, 2012. "Squeezing the state: tariff revenue, state capacity and the WTO’s Doha Round," Global Development Institute Working Paper Series 16912, GDI, The University of Manchester.
    10. Muhammad, Andrew & Meade, Birgit Gisela Saager & Regmi, Anita & Seale, James L., 2011. "International Evidence on Food Consumption Patterns: An Update Using 2005 International Comparison Program Data," Technical Bulletins 120252, United States Department of Agriculture, Economic Research Service.
    11. Dandres, Thomas & Gaudreault, Caroline & Tirado-Seco, Pablo & Samson, Réjean, 2012. "Macroanalysis of the economic and environmental impacts of a 2005–2025 European Union bioenergy policy using the GTAP model and life cycle assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(2), pages 1180-1192.
    12. Olekseyuk, Zoryana & Schürenberg-Frosch, Hannah, 2016. "Are Armington elasticities different across countries and sectors? A European study," Economic Modelling, Elsevier, vol. 55(C), pages 328-342.
    13. Dandres, Thomas & Gaudreault, Caroline & Seco, Pablo Tirado & Samson, Réjean, 2014. "Uncertainty management in a macro life cycle assessment of a 2005–2025 European bioenergy policy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 36(C), pages 52-61.
    14. McCleery, Robert & DePaolis, Fernando, 2014. "So you want to build a trade model? Available resources and critical choices," Economic Modelling, Elsevier, vol. 40(C), pages 199-207.
    15. Athukorala, Premachandra & Riedel, James, 1994. "Demand and Supply Factors in the Determination of NIE Exports: A Simultaneous Error-Correction Model for Hong Kong: A Comment," Economic Journal, Royal Economic Society, vol. 104(427), pages 1411-1414, November.
    16. Andrew Mold & Rodgers Mukwaya, 2015. "The Effects of the Tripartite Free Trade Area: Towards a New Economic Geography in Southern, Eastern and Northern Africa?," Discussion Papers 2015-04, University of Nottingham, CREDIT.
    17. Muhammad, Andrew & Meade, Birgit Gisela Saager, 2011. "International Evidence on Food Consumption Patterns: An Update Using 2005 International Comparison Program Data," Technical Bulletins 120252, United States Department of Agriculture, Economic Research Service.
    18. Hillberry, Russell & Hummels, David, 2013. "Trade Elasticity Parameters for a Computable General Equilibrium Model," Handbook of Computable General Equilibrium Modeling, Elsevier.
    19. Meade, Birgit & Muhammad, Andrew, 0. "New International Evidence on Food Consumption Patterns: A Focus on Cross-Price Effects Based on 2005 International Comparison Program Data," Amber Waves, United States Department of Agriculture, Economic Research Service, issue 03, April.

    More about this item

    Keywords

    Trade policy reform; WTO; agricultural trade; computable general equilibrium.;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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