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Implementing Quotas in GTAP Using GEMPACK or How to Linearize an Inequality

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  • Bach, Christian Friis
  • Ken Pearson

Abstract

Note added March 2002 The methods described in the paper below have been automated as part of Release 8.0 of GEMPACK. This new version of GEMPACK (which is being beta tested by several modellers now and will be officially released later in 2002) makes it very easy to implement quotas (including import/export quotas and tariff rate quotas). This means that many of the implementation details in the technical paper below are no longer required. If you need to implement quotas etc in GEMPACK, please consult Ken Pearson. 1996, September. This document describes how explicit import and export quotas can be implemented and solved in the GTAP CGE trade model. The techniques described here apply equally well to other general and partial equilibrium models implemented and solved using the GEMPACK software. They also generalise to procedures for handling other inequalities in models solved via GEMPACK (even though GEMPACK does not allow explicit inequalities in the algebraic representation of models). In this document we review some recent applications of GTAP in which explicit import and export quotas have been modelled, and discuss how important it was for these applications to have explicit treatment of quotas. Accompanying this document are various computer files containing the ingredients of examples that readers can carry out for themselves while reading this paper. These files can also be used as a starting point for those who wish to explicitly model quotas in their own models.

Suggested Citation

  • Bach, Christian Friis & Ken Pearson, 1996. "Implementing Quotas in GTAP Using GEMPACK or How to Linearize an Inequality," GTAP Technical Papers 307, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    • Handle: RePEc:gta:techpp:307
    Note: GTAP Technical Paper No. 04
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    References listed on IDEAS

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    1. K.R. Pearson, 1991. "Solving Nonlinear Economic Models Accurately Via a Linear Representation," Centre of Policy Studies/IMPACT Centre Working Papers ip-55, Victoria University, Centre of Policy Studies/IMPACT Centre.
    2. Harrison, W Jill & Pearson, K R, 1996. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Computational Economics, Springer;Society for Computational Economics, vol. 9(2), pages 83-127, May.
    3. Hertel, Thomas W. & Bach, Christian F. & Dimaranan, Betina & Martin, Will, 1996. "Growth, globalization, and gains from the Uruguay Round," Policy Research Working Paper Series 1614, The World Bank.
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    1. Anania, Giovanni, 2001. "Modeling Agricultural Trade Liberalization. A Review," 2001 Annual meeting, August 5-8, Chicago, IL 20758, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Teixeira, Erly C. & Cypriano, Luiz A. & Pinto, Wildson J., 2002. "Impacts of AFTA and MERCOEURO on Agribusiness in the MERCOSUL Countries," Conference papers 331001, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Dominique van der Mensbrugghe & John C. Beghin & Don Mitchell, 2003. "Modeling Tariff Rate Quotas in a Global Context: The Case of Sugar Markets in OECD Countries," Center for Agricultural and Rural Development (CARD) Publications 03-wp343, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    4. van der Mensbrugghe, Dominique & Beghin, John C. & Mitchell, Don, 2003. "Implementing Tariff Rate Quotas In Cge Models: An Application To Sugar Trade Policies In Oecd Countries," 2003 Annual meeting, July 27-30, Montreal, Canada 22098, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Aziz Elbehri & Thomas Hertel & Will Martin, 2003. "Estimating the Impact of WTO and Domestic Reforms on the Indian Cotton and Textile Sectors: a General‐Equilibrium Approach," Review of Development Economics, Wiley Blackwell, vol. 7(3), pages 343-359, August.
    6. George Philippidis & Hubbard Lionel, 2003. "Varietal Utility and Patriotic Preference: The Cas of European Agriculture," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 66, pages 5-25.
    7. Alekseev, Alexander & Sokolov, Denis & Tourdyeva, Natalia & Yudaeva, Ksenia, 2004. "Estimating the effects of EU enlargement, WTO accession and formation of FTA with EU or CIS on Russian economy," Conference papers 331218, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Martina Brockmeier & Marianne Kurzweil & Janine Pelikan & Petra Salamon, 2005. "WTO Agricultural Negotiations: a comparison of the Harbinson proposal and the Swiss Formula," ENARPRI Working Papers 012, ENARPRI (European Network of Agricultural and Rural Policy Research Institutes).
    9. Markus Lips & Peter Rieder, 2005. "Abolition of Raw Milk Quota in the European Union: A CGE Analysis at the Member Country Level," Journal of Agricultural Economics, Wiley Blackwell, vol. 56(1), pages 1-17, March.
    10. Karaky, Rabih H. & Arndt, Channing, 2002. "Climate Variability and Agricultural Policy in Morocco," Conference papers 331033, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Philippidis, George, 2005. "Agricultural trade liberalisation in the Doha Round: impacts on Spain," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 5(10), pages 1-28.
    12. Philippidis, G. & Hubbard, L. J., 2001. "The economic cost of the CAP revisited," Agricultural Economics, Blackwell, vol. 25(2-3), pages 375-385, September.
    13. Michael J. Ferrantino, 2006. "Quantifying the Trade and Economic Effects of Non-Tariff Measures," OECD Trade Policy Papers 28, OECD Publishing.
    14. Elbehri, Aziz & Pearson, Ken, 2000. "Implementing Bilateral Tariff Rate Quotas In Gtap Using Gempack," Technical Papers 28715, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    15. Philippidis, George & Hubbard, Lionel J. & Renwick, Alan W., 2006. "A CGE Analysis of the Harbinson Proposal: Outcomes for the EU25," Working Papers 45992, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    16. Brockmeier, Martina & Kurzweil, Marianne & Pelikan, Janine & Salamon, Petra, 2005. "WTO Agricultural Negotiations: A Comparison of the Harbinson Proposal and the Swiss Formula," ENARPRI Working Papers 25133, European Network of Agricultural and Rural Policy Research Institutes (ENARPRI).
    17. Beckman, Jayson & Arita, Shawn & Mitchell, Lorraine, 2015. "The Transatlantic Trade and Investment Partnership and Agriculture: A Quantitative Analysis," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205056, Agricultural and Applied Economics Association.
    18. Jafari, Yaghoob & Britz, Wolfgang & Guimbard, Houssein & Beckman, Jayson, 2021. "Properly capturing tariff rate quotas for trade policy analysis in computable general equilibrium models," Economic Modelling, Elsevier, vol. 104(C).

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