Foreign Direct Investment in Applied General Equilibrium Models

Arjan Lejour () and Hugo Rojas-Romagosa ()

CPB Memoranda from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: Global applied general equilibrium (AGE) models focus on the interactions between regional product markets. Many of these models are developed to represent trade flows and evaluate trade policies. Foreign direct investment (FDI) and foreign commercial presence are ignored in most of them, although sales by foreign affiliates sometimes exceed the value of trade flows. This paper gives an overview of the scarce literature on modelling FDI in AGE models. Modelling options, data availability and simulation results are reviewed. Some conclusions are drawn for future work.

Keywords: CGE models; FDI; economic modelling (search for similar items in EconPapers)
JEL-codes: C68 F23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp and nep-int
Date: 2006-12
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Persistent link: http://EconPapers.repec.org/RePEc:cpb:memodm:169

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