General Equilibrium Analysis of Strategic Trade

Koushik Das

Foreign Trade Review, 2014, vol. 49, issue 3, 219-245

Abstract: Strategic trade refers to international trade under market imperfections. The purpose of the article is to comprehend general equilibrium implications of trade liberalization on Indian macroeconomic aspects under alternative market structures. We applied computable general equilibrium modelling as our relevant methodology following the work of Shoven and Whalley (1984). Constructing a four sector social accounting matrix for India, this article attempts to purport the effects of liberalized trade over different macroeconomic aspects under monopolistic competition and compares the results with the same obtained under benchmark perfect competition scenario. Our study reveals that trade under imperfect competition could not produce any greater domestic output, expansion of trade in terms of volume of export and import, and gains from trade as compared to standard perfect competition scenario.

Keywords: CGE; SAM; monopolistic competition; trade liberalization (search for similar items in EconPapers)
JEL-codes: D58 E16 F12 F17 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:sae:fortra:v:49:y:2014:i:3:p:219-245

DOI: 10.1177/0015732514539200

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