Import preference change and its impacts on the effects of trade liberalization policy

Han-Pang Su, Tzu-Han Yang and Chun-Chiang Feng

No 332109, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: In the recent years, the import shares of intermediate inputs for Taiwan’s manufacturing sector and that of household manufacture consumption continues to rise even with the relative import price increase. This phenomenon may be due to the global trend of production outsourcing, the increase of imported product variety and the persistence of trade barriers, which altogether are called the imported preference change in this article. But most of the macroeconomic models did not consider the change of import preference in their import demand and therefore may generate biased empirical results. By establishing a single country Computable General Equilibrium (CGE) model including the import preference factor, this paper first calibrates the change of import preference of the sample period, then applies the model to the simulation of a trade liberalization policy. By comparing the empirical results with and without the concern of the import preference change, the bias from neglect of the preference change may be revealed.

Keywords: International Relations/Trade; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 32
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332109

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