The Effect Of Armington Structure On Welfare Evaluations In Global Cge-Models
In this paper, the welfare results in trade liberalisation scenarios in global CGE models (like GTAP) are analysed. The default modeling strategy in trade is the Armington assumption with bilateral trade flows in industries. The negative terms of trade effects that often dominate the negative welfare outcome in simulation experiments are decomposed to imports and exports price effects. The numerical examples show that even in unilateral liberalisation with decreasing import tariffs, the welfare effects are dominated by domestic price level changes that also drive the exports prices. The numerical examples are built around simple GTAP tariff cut experiments with 3x3 country and commodity aggregation. The inherent feature in this type of models is that they support arguments for unilateral market access, like preferences, at the expense of multilateral trade liberalisation.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.eaae.orgEmail: |
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
- Donald R. Davis, 1996.
"Trade Liberalization and Income Distribution,"
Harvard Institute of Economic Research Working Papers
1769, Harvard - Institute of Economic Research.
- Arvind Panagariya, 2000. "Preferential Trade Liberalization: The Traditional Theory and New Developments," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 287-331, June.
When requesting a correction, please mention this item's handle: RePEc:ags:eaa107:6397. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.