IDEAS home Printed from
   My bibliography  Save this paper

A Dynamic CGE Model: An Application of R&D- Based Endogenous Growth Model Theory


  • Diao, Xinshen
  • Elbasha, Elamin H.
  • Roe, Terry L.
  • Yeldan, A. Erinc


An R&D based endogenous growth - applied general equilibrium model is developed from an underlying analytical model which combines Romer's capital variety with Grossman and Helpman's multi-sector open economy model. The transitional dynamics of the analytical model are derived. For numerical implementation, a time discrete empirical model, with an Armington structure, is fit to East Asian data of the social accounting matrix variety. Simulations of trade reform are performed and their static and dynamic effects compared. The transition paths of the state variables are found to have a half-life of five to six periods. A solution of the Social Planner's problem, and interventions which seek to obtain this outcome from the decentralized model are also obtained'.

Suggested Citation

  • Diao, Xinshen & Elbasha, Elamin H. & Roe, Terry L. & Yeldan, A. Erinc, 1996. "A Dynamic CGE Model: An Application of R&D- Based Endogenous Growth Model Theory," Bulletins 7461, University of Minnesota, Economic Development Center.
  • Handle: RePEc:ags:umedbu:7461

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Mas-Colell,Andreu, 1990. "The Theory of General Economic Equilibrium," Cambridge Books, Cambridge University Press, number 9780521388702, March.
    2. Hillman, Arye L & Ursprung, Heinrich W, 1988. "Domestic Politics, Foreign Interests, and International Trade Policy," American Economic Review, American Economic Association, vol. 78(4), pages 719-745, September.
    3. Mayer, Wolfgang, 1984. "Endogenous Tariff Formation," American Economic Review, American Economic Association, vol. 74(5), pages 970-985, December.
    4. Findlay, Ronald & Wellisz, Stanislaw, 1983. "Some Aspects of the Political Economy of Trade Restrictions," Kyklos, Wiley Blackwell, vol. 36(3), pages 469-481.
    5. Mayer, Wolfgang & Riezman, Raymond G., 1987. "Endogenous choice of trade policy instruments," Journal of International Economics, Elsevier, vol. 23(3-4), pages 377-381, November.
    6. Wellisz, Stanislaw & Wilson, John D., 1986. "Lobbying and tariff formation: A deadweight loss consideration," Journal of International Economics, Elsevier, vol. 20(3-4), pages 367-375, May.
    7. Coggins, Jay S., 1989. "On the existence and optimality of equilibria in lobbying economies," Faculty Theses and Dissertations 144662, University of Minnesota, Department of Applied Economics.
    8. Ronald Findlay & Stanislaw Wellisz, 1982. "Endogenous Tariffs, the Political Economy of Trade Restrictions, and Welfare," NBER Chapters,in: Import Competition and Response, pages 223-244 National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Gopinath, Munisamy & Roe, Terry L., 1996. "R&D Spillovers: Evidence from U.S. Food Processing, Farm Machinery and Agriculture," Bulletins 7504, University of Minnesota, Economic Development Center.
    2. Diao, Xinshen & Roe, Terry & Yeldan, Erinc, 1999. "Strategic policies and growth: an applied model of R&D-driven endogenous growth," Journal of Development Economics, Elsevier, vol. 60(2), pages 343-380, December.
    3. Hong, Chanyoung & Yang, Heewon & Hwang, Wonsik & Lee, Jeong-Dong, 2014. "Validation of an R&D-based computable general equilibrium model," Economic Modelling, Elsevier, vol. 42(C), pages 454-463.
    4. Roe, Terry L. & Mohtadi, Hamid, 1999. "International Trade And Growth: An Overview From The Perspective Of The New Growth Theory," 1999 Annual meeting, August 8-11, Nashville, TN 21536, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    More about this item


    Applied General Equilibrium; Trade; Growth; International Relations/Trade; F11; 031; 041;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:umedbu:7461. 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). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.