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Impact of Trade Liberalization and World Price Changes in Bangladesh: A Computable General Equilibrium Analysis

Author

Listed:
  • Alam, Mohammad Jahangir
  • Buysse, Jeroen
  • Begum, Ismat Ara
  • Nolte, Stephan
  • Wailes, Eric J.
  • Van Huylenbroeck, Guido

Abstract

The paper analyzes the impact of trade liberalization and changes in world prices of agricultural commodities in Bangladesh using single country CGE model. Since the agricultural sector is sensitive to overall employment, household welfare and food security, the analysis focuses on the changes in agricultural production, consumption, household income and welfare. The results show that trade liberalization increases the welfare of all household groups while world market price increases decrease welfare. It means that although trade liberalization generates a welfare increase for households but this is dependent on the relative level of world commodity prices. Our results are based on the analysis of aggregate household groups, so it may be of future research interest to extend the model with more detailed household groups using a CGE-micro simulation approach.

Suggested Citation

  • Alam, Mohammad Jahangir & Buysse, Jeroen & Begum, Ismat Ara & Nolte, Stephan & Wailes, Eric J. & Van Huylenbroeck, Guido, 2012. "Impact of Trade Liberalization and World Price Changes in Bangladesh: A Computable General Equilibrium Analysis," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 123724, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae12:123724
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    File URL: http://ageconsearch.umn.edu/record/123724/files/IAAE2012CGE_Alam%20et%20al..pdf
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    References listed on IDEAS

    as
    1. Raihan, Selim, 2004. "Trade Barriers in a Global Perspective," Centre on Regulation and Competition (CRC) Working papers 30618, University of Manchester, Institute for Development Policy and Management (IDPM).
    2. Decaluwe, Bernard & Martens, Andre, 1988. "CGE modeling and developing economies: A concise empirical survey of 73 applications to 26 countries," Journal of Policy Modeling, Elsevier, vol. 10(4), pages 529-568.
    3. James E. Anderson & Will Martin, 1996. "The Welfare Analysis of Fiscal Policy: A Simple Unified Account," Boston College Working Papers in Economics 316., Boston College Department of Economics.
    4. Quentin Wodon & Hassan Zaman, 2010. "Higher Food Prices in Sub-Saharan Africa: Poverty Impact and Policy Responses," World Bank Research Observer, World Bank Group, vol. 25(1), pages 157-176, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Agricultural and Food Policy; Demand and Price Analysis; Food Security and Poverty; International Development; International Relations/Trade;

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