Are we there yet? Adjustment paths in response to Tariff shocks: a CGE Analysis

Cedric Hodges and Tony Wiskich

No 330171, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This paper takes the mini USAGE model developed by Dixon and Rimmer (2005) and modifies it in order to better mimic the expected adjustment path following a tariff reduction. Results from the adjusted model are compared against the standard model. It is found that while the standard model does a good job of capturing the expected long-run behaviour of the economy in response to this shock, the adjustment path is not appropriate. However, with a few relatively straight forward changes, the standard model can produce both satisfactory long-run outcomes and a more plausible adjustment path. These changes are documented in an appendix and are considered applicable to a wide range of models currently in use.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 9
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:330171

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