THE ECONOMIC COSTS TO THE U.S. OF CLOSING ITS BORDERS: A COMPUTABLE GENERAL EQUILIBRIUM ANALYSIS

Peter Dixon, James Giesecke, Maureen Rimmer and Adam Rose

Defence and Peace Economics, 2011, vol. 22, issue 1, 85-97

Abstract: We use a CGE model to simulate the effects of a one-year US border closure. Relative to previously used input-output modeling, CGE modeling offers a flexible framework for capturing bottleneck and labor-market effects. Our analysis suggests that the costs of a prolonged closure could be much greater than indicated by input-output studies. We find that cutting all imports by 95% in an environment of sticky real wages would reduce GDP by 48%. However, if bottleneck imports (mainly oil) were exempt and workers accepted real wage cuts then the GDP reduction would be only 11%.

Keywords: Border closure; Strategic reserves; Bottleneck imports; Dynamic CGE; Terrorism; Pandemics (search for similar items in EconPapers)
Date: 2011
References: View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/10242694.2010.491658 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:defpea:v:22:y:2011:i:1:p:85-97

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GDPE20

DOI: 10.1080/10242694.2010.491658

Access Statistics for this article

Defence and Peace Economics is currently edited by Professor Keith Hartley

More articles in Defence and Peace Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().