General Equilibrium Analysis of Strategic Trade: A Computable General Equilibrium Model for India

Koushik Das and Pinaki Chakraborti
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Koushik Das: Koushik Das, Assistant Professor, Department of Economics, Chandias Mahavidyalaya, affiliated to Burdwan University, West Bengal, India. E-mail: koushik10in2001@gmail.com
Pinaki Chakraborti: Pinaki Chakraborti, Professor, Department of Economics, Burdwan University, West Bengal, India. E-mail: c.pinaki@gmail.com

IIM Kozhikode Society & Management Review, 2014, vol. 3, issue 2, 165-181

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 (CGE) modelling as our relevant methodology following Shoven and Whalley, ( 1984 ). Constructing a four sector social accounting matrix (SAM) for India, the article attempts to purport the effects of liberalized trade over different macroeconomic aspects under monopolistic competition and compared 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)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:sae:iimkoz:v:3:y:2014:i:2:p:165-181

DOI: 10.1177/2277975214542060

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