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Global Supply Chains: towards a CGE analysis

Author

Listed:
  • Prema-chandra Athukorala
  • Peter B. Dixon
  • Maureen T. Rimmer

Abstract

Economists have analysed global supply chains (GSC) using pure theory, case studies, econometrics and input-output calculations. We now need a new type of computable general equilibrium (CGE) model to show how GSC trade affects welfare and its distribution between and within nations. The new model must recognize: fragmentation of production; scale economies; intermediate inputs that cross national borders multiple times embodied in products at different stages of completion; and decision-making by global agents. We describe a prototype that incorporates these features and gives interpretable results not attainable with a standard CGE model. We discuss steps to move from the prototype to a policy-relevant model.

Suggested Citation

  • Prema-chandra Athukorala & Peter B. Dixon & Maureen T. Rimmer, 2017. "Global Supply Chains: towards a CGE analysis," Centre of Policy Studies/IMPACT Centre Working Papers g-281, Victoria University, Centre of Policy Studies/IMPACT Centre.
  • Handle: RePEc:cop:wpaper:g-281
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models

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