Dynamic Gains and Market Access Insurance: Another look at the AUSFTA

Richard Harris and Peter Robertson

No 2007-23, Discussion Papers from School of Economics, The University of New South Wales

Abstract: We use a dynamic computable general equilibrium model to revisit the dynamic benefits of the Australia-USA Free Trade Agreement and, in particular, to evaluate the insurance value of this agreement in the face of regional and global trade wars. The insurance benefits are quantified by comparing the status quo against alternative scenarios where some or all regions raise tariffs by 10 percent, both permanently and temporarily. These insurance gains are found to be as much as four times larger than the traditional status quo efficiency gains.

Keywords: Trade policy; Computable General Equilibrium; Human Capital; Dynamics (search for similar items in EconPapers)
JEL-codes: F15 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2007-07
New Economics Papers: this item is included in nep-cmp and nep-ias
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