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Projected Benefits of the Doha Round Hinge on Misleading Trade Models

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Abstract

Projected welfare gains from trade liberalization are derived from global computable general equilibrium (CGE) models, which are based on highly unrealistic assumptions. In this SCEPA Policy Note, the authors analyze the foundation of CGE models and argue that their predictions are often misleading. They find that any possible Doha trade agreement is likely to introduce substantial macroeconomic risk for developing countries, and particularly sub Saharan Africa.

Suggested Citation

  • Lance Taylor & Rudiger von Arnim, 2007. "Projected Benefits of the Doha Round Hinge on Misleading Trade Models," SCEPA policy note series. 2007-03, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    • Handle: RePEc:epa:cepapn:2007_03
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    File URL: https://repec.economicpolicyresearch.org/images/docs/research/globalization_trade/Doha_Policy_Note_Final_03_12_07.pdf
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    References listed on IDEAS

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    1. World Bank, 2002. "Global Economic Prospects and the Developing Countries 2002," World Bank Publications - Books, The World Bank Group, number 14050, October.
    2. Taylor, Lance & Lysy, Frank J., 1979. "Vanishing income redistributions : Keynesian clues about model surprises in the short run," Journal of Development Economics, Elsevier, vol. 6(1), pages 11-29, February.
    3. Frank Ackerman, "undated". "The Shrinking Gains from Trade: A Critical Assessment of Doha Round Projections," GDAE Working Papers 05-01, GDAE, Tufts University.
    4. Will Martin & Kym Anderson, 2006. "Agricultural Trade Reform and the Doha Development Agenda," World Bank Publications - Books, The World Bank Group, number 6889, October.
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    Cited by:

    1. 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.

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    Keywords

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    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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