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Dynamic Gains and Market Access Insurance: Another look at the AUSFTA

Author

Listed:
  • Richard G. Harris

    (Department of Economics, Simon Fraser University)

  • Peter E. Robertson

    (School of Economics, The University of New South Wales)

Abstract

We use a dynamic computable general equilibrium model to revisit the dynamic benefits of the Australia-USA Free Trade Agreement and, in particular, to evaluate the insurance value of this agreement in the face of regional and global trade wars. The insurance benefits are quantified by comparing the status quo against alternative scenarios where some or all regions raise tariffs by 10 percent, both permanently and temporarily. These insurance gains are found to be as much as four times larger than the traditional status quo efficiency gains.

Suggested Citation

  • Richard G. Harris & Peter E. Robertson, 2007. "Dynamic Gains and Market Access Insurance: Another look at the AUSFTA," Discussion Papers 2007-23, School of Economics, The University of New South Wales.
    • Handle: RePEc:swe:wpaper:2007-23
    as

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    File URL: http://wwwdocs.fce.unsw.edu.au/economics/Research/WorkingPapers/2007_23.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Trade policy; Computable General Equilibrium; Human Capital; Dynamics;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration

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