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Does The Stolper-Samuelson Theorem Hold With Less Trade Distortion?: A Computable General Equilibrium

  • Bittencourt, Maurício Vaz Lobo

This paper examines the effects of agricultural trade policy changes in the Brazilian agriculture using CGE model. An extended Salter-Swan model is employed to verify if the Stolper-Samuelson theorem holds and the consequences in terms of prices, production and resources allocation. Results show that the Stolper-Samuelson hypothesis is reversed when imports and domestic goods are poor substitutes. The reduction in the import tariff increases national income, implying that inappropriate trade policy adjustments can stand in the way of promoting rapid and equitable growth of the economy.

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File URL: http://purl.umn.edu/22173
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2003 Annual meeting, July 27-30, Montreal, Canada with number 22173.

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Date of creation: 2003
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Handle: RePEc:ags:aaea03:22173
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  1. Hertel, Thomas W., 2002. "Applied general equilibrium analysis of agricultural and resource policies," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 26, pages 1373-1419 Elsevier.
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  6. Cattaneo, Andrea & Ojeda, Raul A. Hinojosa- & Robinson, Sherman, 1999. "Costa Rica trade liberalization, fiscal imbalances, and macroeconomic policy: a computable general equilibrium model," The North American Journal of Economics and Finance, Elsevier, vol. 10(1), pages 39-67.
  7. Davies, Rob & Rattso, Jorn & Torvik, Ragnar, 1998. "Short-Run Consequences of Trade Liberalization: A Computable General Equilibrium Model of Zimbabwe," Journal of Policy Modeling, Elsevier, vol. 20(3), pages 305-333, June.
  8. Löfgren, Hans & Harris, Rebecca Lee & Robinson, Sherman, 2001. "A standard computable general equilibrium (CGE) model in GAMS," TMD discussion papers 75, International Food Policy Research Institute (IFPRI).
  9. Lloyd, Peter, 2000. "Generalizing the Stolper-Samuelson Theorem: A Tale of Two Matrices," Review of International Economics, Wiley Blackwell, vol. 8(4), pages 597-613, November.
  10. Wen Cheng & Jeffrey Sachs & Xiaokai Yang, 2000. "A general-equilibrium re-appraisal of the Stolper-Samuelson theorem," Journal of Economics, Springer, vol. 72(1), pages 1-18, February.
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