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Accession to the WTO. Computable General Equilibrium Analysis: the Case of Ukraine. Part II

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  • Eromenko, Igor

Abstract

This research studies the accession of a transition country to the World Trade Organization on the case of Ukraine. Quantitative results are obtained by building a Computable General Equilibrium model in the mathematical programming language General Algebraic Modelling System (GAMS). Four scenarios are simulated: 1) import tariffs reform; 2) improvement of exports access; 3) improvement of investment climate and 4) the scenario that combines previous three, or a full WTO accession. The results of the model show that in all scenarios there is growth of both exports and imports. By contrast, output and household consumption levels vary from scenario to scenario. The first two simulations, tariff reform and improvement of export access, show no significant change in domestic production and consumption. Thus, with expanded trade and practically the same output and consumption, Ukraine merely becomes more open and shifts to foreign trade. In the third scenario, improvement of investment climate has the most favourable results. Owning to better allocation of resources, both domestic production and consumption expand and the welfare of households increases by nearly 10% of consumption or 2% of Gross Domestic Product (GDP). The combined scenario shows a somewhat smaller but still significant improvement in welfare: over 8% of consumption or 1.8% of GDP.

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  • Eromenko, Igor, 2010. "Accession to the WTO. Computable General Equilibrium Analysis: the Case of Ukraine. Part II," MPRA Paper 67452, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:67452
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    Cited by:

    1. M. Chepeliev, 2015. "Econometric estimation of capital-labor substitution elasticities for Ukrainian CGE model," Economy and Forecasting, Valeriy Heyets, issue 2, pages 33-46.

    More about this item

    Keywords

    International trade; Trade policy; International Trade Organizations; Macroeconomic analyses of economic development; Social Accounting Matrix; Computable General Equilibrium model;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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