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Versatility and Specificity of PE Models for Trade Policy Analysis

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  • Ahmad, Saad
  • Riker, David

Abstract

The ex-ante effects of trade agreements are usually predicted with economy-wide models under a general equilibrium closure so that inter-industry linkages are accounted for in the policy simulation. However, modern trade agreements increasingly have policies that target specific industries and are not easily accounted for in the economy-wide analysis. In these instances, partial equilibrium (PE) models can play a key role in the analysis by examining in detail the impact of industry-specific trade provisions and then incorporating these expected trade effects in the overall economy-wide model. This paper shows how PE models can be used to map industry-specific trade policies and highlights some provisions in the recent U.S.-Mexico-Canada Agreement (USMCA) that are well suited for a PE analysis.

Suggested Citation

  • Ahmad, Saad & Riker, David, 2020. "Versatility and Specificity of PE Models for Trade Policy Analysis," Conference papers 333160, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333160
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    File URL: https://ageconsearch.umn.edu/record/333160/files/9711.pdf
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    References listed on IDEAS

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    1. Paul Dolfen & Liran Einav & Peter J. Klenow & Benjamin Klopack & Jonathan D. Levin & Larry Levin & Wayne Best, 2023. "Assessing the Gains from E-Commerce," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(1), pages 342-370, January.
    2. Andriamananjara, Soamiely & Dean, Judith M. & Feinberg, Robert & Ferrantino, Michael J. & Ludema, Rodney & Tsigas, Marinos E., 2004. "The Effects of Non-Tariff Measures on Prices, Trade, and Welfare: CGE Implementation of Policy-Based Price Comparisons," Working Papers 15863, United States International Trade Commission, Office of Economics.
    3. Narayanan, Badri & Thomas Hertel & Mark Horridge, 2010. "Linking Partial and General Equilibrium Models: A GTAP Application Using TASTE," GTAP Technical Papers 3192, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
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