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05-01 "The Shrinking Gains from Trade: A Critical Assessment of Doha Round Projections"

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  • Frank Ackerman

Abstract

Computable general equilibrium (CGE) models of world trade, often presented as demonstrating the benefits of trade liberalization, now make much more modest forecasts than they did just a few years ago. The estimated benefits are not only small in the aggregate, but also skewed toward developed countries; the expected contribution of trade liberalization to economic development and poverty alleviation is extremely limited. Related calculations, for the expected benefits of services liberalization, trade facilitation measures, and long-term productivity gains from trade liberalization, remain problematical and/or speculative. The empirical limitations of CGE forecasts rest on broader theoretical weaknesses: the models are largely locked within a static framework, and remarkably assume that trade policy causes no changes in total employment, up or down. Models built on more adequate theories, which have only begun to appear, would paint a very different picture of the effects of trade liberalization.

Suggested Citation

  • Frank Ackerman, "undated". "05-01 "The Shrinking Gains from Trade: A Critical Assessment of Doha Round Projections"," GDAE Working Papers 05-01, GDAE, Tufts University.
  • Handle: RePEc:dae:daepap:05-01
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    References listed on IDEAS

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    1. Krugman, Paul R, 1987. "Is Free Trade Passe?," Journal of Economic Perspectives, American Economic Association, vol. 1(2), pages 131-144, Fall.
    2. William R. Cline, 2004. "Trade Policy and Global Poverty," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 379.
    3. Antoine Bouët & Jean-Christophe Bureau & Yvan Decreux & Sébastien Jean, 2005. "Multilateral Agricultural Trade Liberalisation: The Contrasting Fortunes of Developing Countries in the Doha Round," The World Economy, Wiley Blackwell, vol. 28(9), pages 1329-1354, September.
    4. Paul Oslington, 2005. "Unemployment and Trade Liberalisation," The World Economy, Wiley Blackwell, vol. 28(8), pages 1139-1155, August.
    5. Frank Ackerman, 2001. "Still dead after all these years: interpreting the failure of general equilibrium theory," Journal of Economic Methodology, Taylor & Francis Journals, vol. 9(2), pages 119-139.
    6. Werner Antweiler & Daniel Trefler, 2002. "Increasing Returns and All That: A View from Trade," American Economic Review, American Economic Association, vol. 92(1), pages 93-119, March.
    7. Hertel, Thomas & Hummels, David & Ivanic, Maros & Keeney, Roman, 2007. "How confident can we be of CGE-based assessments of Free Trade Agreements?," Economic Modelling, Elsevier, vol. 24(4), pages 611-635, July.
    8. Will Martin & Kym Anderson, 2006. "Agricultural Trade Reform and the Doha Development Agenda," World Bank Publications, The World Bank, number 6889.
    9. Francois, Joseph & van Meijl, Hans & van Tongeren, Frank, 2003. "Trade Liberalization and Developing Countries Under the Doha Round," CEPR Discussion Papers 4032, C.E.P.R. Discussion Papers.
    10. Drusilla K. Brown & Alan V. Deardorff & Robert M Stern, 2002. "Computational Analysis of Multilateral Trade Liberalization in the Uruguay Round and Doha Development Round," Working Papers 489, Research Seminar in International Economics, University of Michigan.
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    12. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005. "Global impacts of Doha trade reform scenarios on poverty," Policy Research Working Paper Series 3735, The World Bank.
    13. Stephen Tokarick, 2005. "Who Bears the Cost of Agricultural Support in OECD Countries?," The World Economy, Wiley Blackwell, vol. 28(4), pages 573-593, April.
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    Cited by:

    1. Will Martin & Kym Anderson, 2007. "The Doha agenda and agricultural trade reform: the role of economic analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 37(s1), pages 77-87, December.
    2. Maoz, Yishay D. & Peled, Dan & Sarid, Assaf, 2011. "Trade agreements, bargaining and economic growth," Journal of Macroeconomics, Elsevier, vol. 33(1), pages 92-101, March.
    3. Féménia, Fabienne & Gohin, Alexandre, 2011. "Dynamic modelling of agricultural policies: The role of expectation schemes," Economic Modelling, Elsevier, vol. 28(4), pages 1950-1958, July.
    4. Drogue, Sophie & Bartova, Lubica, 2007. "A Critical Survey of Databases on Tariffs and Trade Available for the Analysis of EU Agricultural Agreements," Working Papers 7287, TRADEAG - Agricultural Trade Agreements.

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