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The role of trade elasticities in shaping uncertainty in CGE policy outcomes

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  • Aguiar, Angel
  • Chepeliev, Maksym
  • Golub, Alla
  • Hertel, Thomas
  • Soderbery, Anson
  • van der Mensbrugghe, Dominique

Abstract

Computable general equilibrium (CGE) models have become a widespread method to assess economy-wide and sectoral impacts of trade policies. While the results of simulations with these models depend on a number of inputs, trade elasticities are of particular interest because of their significant impact on modeled trade patterns, welfare and factor returns. Our objective is to implement and evaluate, within the context of a CGE model, an up-to-date set of trade elasticities, and investigate the role of these parameters in key trade policy modelling uncertainties.

Suggested Citation

  • Aguiar, Angel & Chepeliev, Maksym & Golub, Alla & Hertel, Thomas & Soderbery, Anson & van der Mensbrugghe, Dominique, 2020. "The role of trade elasticities in shaping uncertainty in CGE policy outcomes," Conference papers 333206, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333206
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    References listed on IDEAS

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    1. Lionel Fontagné & Houssein Guimbard & Gianluca Orefice, 2019. "Product-Level Trade Elasticities," Working Papers 2019-17, CEPII research center.
    2. Soderbery, Anson, 2018. "Trade elasticities, heterogeneity, and optimal tariffs," Journal of International Economics, Elsevier, vol. 114(C), pages 44-62.
    3. Hillberry, Russell & Hummels, David, 2013. "Trade Elasticity Parameters for a Computable General Equilibrium Model," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1213-1269, Elsevier.
    4. Hertel, Thomas & Hummels, David & Ivanic, Maros & Keeney, Roman, 2007. "How confident can we be of CGE-based assessments of Free Trade Agreements?," Economic Modelling, Elsevier, vol. 24(4), pages 611-635, July.
    5. Thomas W. Hertel & Uris Lantz C. Baldos & Dominique van der Mensbrugghe, 2016. "Predicting Long-Term Food Demand, Cropland Use, and Prices," Annual Review of Resource Economics, Annual Reviews, vol. 8(1), pages 417-441, October.
    6. Chepeliev, Maksym & Golub, Alla & Hertel, Thomas W. & Saeed, Wajiha, 2019. "U. S. Trade Policies and Their Impact on Domestic Vegetables, Fruits and Nuts Sector: a Detailed Tariff Line Analysis," 2019 Annual Meeting, July 21-23, Atlanta, Georgia 291075, Agricultural and Applied Economics Association.
    7. 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.
    8. Angel Aguiar & Maksym Chepeliev & Erwin L. Corong & Robert McDougall & Dominique van der Mensbrugghe, 2019. "The GTAP Data Base: Version 10," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 4(1), pages 1-27, June.
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