Global Supply Chains: towards a CGE analysis

Prema-chandra Athukorala, Peter Dixon and Maureen Rimmer

Centre of Policy Studies/IMPACT Centre Working Papers from Victoria University, Centre of Policy Studies/IMPACT Centre

Abstract: Economists have analysed global supply chains (GSC) using pure theory, case studies, econometrics and input-output calculations. We now need a new type of computable general equilibrium (CGE) model to show how GSC trade affects welfare and its distribution between and within nations. The new model must recognize: fragmentation of production; scale economies; intermediate inputs that cross national borders multiple times embodied in products at different stages of completion; and decision-making by global agents. We describe a prototype that incorporates these features and gives interpretable results not attainable with a standard CGE model. We discuss steps to move from the prototype to a policy-relevant model.

JEL-codes: C67 C68 F12 F60 (search for similar items in EconPapers)
Date: 2017-12
New Economics Papers: this item is included in nep-cmp and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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