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Japan–Korea Trade Liberalization Revisited: The Role of Armington Elasticities


  • Kim, Jiyoung
  • Nakano, Satoshi
  • Nishimura, Kazuhiko


The elasticity of substitution between foreign and domestic products, i.e., Armington elasticity, is measured by way of two-state calibration according to the temporally distant observations of the market shares, and associated price changes. Along with the sector-wise multifactor CES elasticity estimated using the linked input-output tables, we integrate domestic production of the two countries (Japan and the Republic of Korea) with bilateral trades and construct a bilateral general equilibrium model. Thereupon, we perform an economic assessment of trade liberalization between the two countries.

Suggested Citation

  • Kim, Jiyoung & Nakano, Satoshi & Nishimura, Kazuhiko, 2017. "Japan–Korea Trade Liberalization Revisited: The Role of Armington Elasticities," IDE Discussion Papers 665, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  • Handle: RePEc:jet:dpaper:dpaper665

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    More about this item


    International trade; Input-output tables; Tariff; South Korea; Japan; Linked Input-Output Tables; Two-state Calibration; Tariff Elimination;
    All these keywords.

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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