THE EFFECT OF ARMINGTON STRUCTURE ON WELFARE EVALUATIONS IN GLOBAL CGE-MODELS

Leena Kerkelä

No 6397, 107th Seminar, January 30-February 1, 2008, Sevilla, Spain from European Association of Agricultural Economists

Abstract: In this paper, the welfare results in trade liberalisation scenarios in global CGE models (like GTAP) are analysed. The default modeling strategy in trade is the Armington assumption with bilateral trade flows in industries. The negative terms of trade effects that often dominate the negative welfare outcome in simulation experiments are decomposed to imports and exports price effects. The numerical examples show that even in unilateral liberalisation with decreasing import tariffs, the welfare effects are dominated by domestic price level changes that also drive the exports prices. The numerical examples are built around simple GTAP tariff cut experiments with 3x3 country and commodity aggregation. The inherent feature in this type of models is that they support arguments for unilateral market access, like preferences, at the expense of multilateral trade liberalisation.

Keywords: International Relations/Trade; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 8
Date: 2008
New Economics Papers: this item is included in nep-cmp and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/6397/files/pp08ke20.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa107:6397

DOI: 10.22004/ag.econ.6397

Access Statistics for this paper

More papers in 107th Seminar, January 30-February 1, 2008, Sevilla, Spain from European Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().