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Implementing Quotas In Gtap Using Gempack Or How To Linearize An Inequality, Christian F. Bach, Ken Pearson

GTAP Technical Papers

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 …

Reconciling Bilateral Trade Data For Use In Gtap, Mark Gehlhar

GTAP Technical Papers

Bilateral trade flows are reported by both importers and exporters. Large discrepancies in reported import/export trade flows can be found when these two reports are compared.

The GTAP database requires consistency between the export flow and its corresponding import flow for all partner pairs. Therefore, bilateral trade data in its reported form cannot be directly used for GTAP. Various methods can be used to produce a consistent set of bilateral trade flows. However, achieving consistency alone does not necessarily provide credible trade flows.

Matrix balancing using trade totals published by international agencies is not appropriate since these totals are not …

Introducing Monopolistic Competition Into The Gtap Model, Thomas Hertel, Padma Swaminathan

GTAP Technical Papers

This technical paper documents one approach to incorporating monopolistic competition into the GTAP model. In this framework, consumer preferences are heterogeneous, leading to an apparent "love of variety" in the aggregate utility function for each region. The more heterogeneous are preferences, the smaller the elasticity of substitution in the aggregate utility function, and the greater the value placed on the addition of new varieties. The same is true for firms, which experience lower unit costs for differentiated, intermediate inputs, as the number of varieties on offer increases. In order to meet the diverse needs of consumers, firms differentiate their products …

An Introduction To Systematic Sensitivity Analysis Via Gaussian Quadrature, Channing Arndt

GTAP Technical Papers

Economists recognize that results from simulation models are dependent, sometimes highly dependent, on values employed for critical exogenous variables.

To account for this, analysts sometimes conduct sensitivity analysis with respect to key exogenous variables.

This paper presents a practical approach for conducting systematic sensitivity analysis, called Gaussian quadrature.

The approach views key exogenous variables as random variables with associated distributions. It produces estimates of means and standard deviations of model results while requiring a limited number of solves of the model. Under mild conditions, all of which hold with respect to the GTAP model, there is strong reason to believe …

Liberalization And Capital Accumulation In The Gtap Model, Joseph Francois, Brad Mcdonald

GTAP Technical Papers

This paper explores trade policy and investment linkages in the GTAP model. This is done under alternative steady-state closure rules linking trade to consumption, production, and investment, and emphasizing the general equilibrium nature of capital accumulation mechanisms.

When policy shocks are capital friendly, induced investment may be greater than suggested by current savings rates. As a result, multiplier-type analysis can be very misleading.

The importance and direction of this magnification hinges critically on the sensitivity of savings rates with respect to real returns. As illustration, we offer a numerical assessment of the Uruguay Round, highlighting such linkages.