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Tariffs in New Zealand : The economic impacts of retaining tariffs in New Zealand A dynamic CGE analysis

Author

Listed:
  • John Ballingall

    (NZ Institute of Economic Research)

  • James Giesecke
  • James Zuccollo

Abstract

The government announced in late 2009 that it would freeze tariffs at current levels until 2015 at the earliest. We examine the potential costs and benefits to the New Zealand economy of this policy decision using a recently-developed dynamic computable general equilibrium (CGE) model of the New Zealand economy. We find that the elimination of tariffs in New Zealand delivers a very small increase in GDP as allocative efficiency improves. However, the terms of trade effects associated with the tariff removal generate a very small welfare loss. We assess the sensitivity of the welfare results to key elasticity parameters.

Suggested Citation

  • John Ballingall & James Giesecke & James Zuccollo, 2010. "Tariffs in New Zealand : The economic impacts of retaining tariffs in New Zealand A dynamic CGE analysis," Trade Working Papers 23085, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:tradew:23085
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    File URL: http://www.eaber.org/node/23085
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    More about this item

    Keywords

    dynamic computable general equilibrium; New Zealand; tariffs; allocative efficiency; cost benefit analysis;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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