Economic Effects of the Tokyo Round

Deardorff, Alan V.; Stern, Robert M.

doi:10.2307/1058704

Cited by 18 publications

(14 citation statements)

References 8 publications

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“…In order to make general equilibrium inference as reliable and transparent as possible we plead for the Pandora's box of growth and trade patterns projections to be unlocked. Table A1 -Post-Tokyo round tariffs by sector Source: Deardorff and Stern (1983).…”

Section: Resultsmentioning

confidence: 99%

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Opening a Pandora’s Box

2013

WTO Working Papers

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Economic projections for the world economy, particularly in relation to the construction of Computable General Equilibrium (CGE) baselines, are generally rather conservative and take scant account of the wide range of possible evolutions authorized by the underlying economic mechanisms considered. Against this background, we adopt an 'open mind' to the projection of world trade trajectories. Taking a 2035 horizon, we examine how world trade patterns will be shaped by the changing comparative advantages, demand, and capabilities of different regions. We combine a convergence model fitting three production factors (capital, labor and energy) and two factor-specific productivities, alongside a dynamic CGE model of the world economy calibrated to reproduce observed elasticity of trade to income. Each scenario involves three steps. First, we project growth at country level based on factor accumulation, educational attainment and efficiency gains, and discuss uncertainties related to our main drivers. Second, we impose this framework (demographics, gross domestic product, saving rates, factors and current account trajectories) on the CGE baseline. Third, we implement trade policy scenarios (tariffs as well as non-tariff measures in goods and services), in order to get factor allocation across sectors from the model as well as demand and trade patterns. We show that the impact of changing baselines is greater than the impact of a policy shock on the order of magnitude of changes in world trade patterns, which points to the need for care when designing CGE baselines.

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Section: Resultsmentioning

confidence: 99%

“…Finally, the overall three-step method is summarized in Figure 5. Deardorff and Stern (1983) and WDI. Fontagné et al (2011).…”

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confidence: 99%

Opening a Pandora’s Box

2013

WTO Working Papers

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“…-4% annual decrease in tariff rates (corresponding to the evolution of simple average tariffs between 1973 and 2004 in Deardorff and Stern, 1983). Finally, what this kind of model cannot reproduce with plausible assumptions, is the trade to income elasticity observed in the 1990s; as already stressed, this period might be unique and it should not be reproduced in the baseline used for projections for future decades.…”

Section: The Dynamic Baseline Calibrationmentioning

confidence: 95%

“…APPENDIX A: TRADE WAR DATA Table A1 -Post-Tokyo round tariffs by sector Source: Deardorff and Stern (1983). …”

Section: Appendixmentioning

confidence: 99%

Opening a Pandora's Box: Modeling World Trade Patterns at the 2035 Horizon

Fontagné

Fouré

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Taking a 2035 horizon, we examine how world trade patterns will be shaped by the changing comparative advantages, demand, and capabilities of different regions. We combine a convergence model fitting three production factors (capital, labor and energy) and two factor-specific productivities, alongside a dynamic CGE model of the world economy calibrated to reproduce observed elasticity of trade to income. Each scenario involves three steps. First, we project growth at country level based on factor accumulation, educational attainment and efficiency gains, and discuss uncertainties related to our main drivers. Second, we impose this framework (demographics, gross domestic product, saving rates, factors and current account trajectories) on the CGE baseline. Third, we implement trade policy scenarios (tariffs as well as non-tariff measures in goods and services), in order to get factor allocation across sectors from the model as well as demand and trade patterns. We show that the impact of changing baselines is greater than the impact of a policy shock on the order of magnitude of changes in world trade patterns, which points to the need for care when designing CGE baselines. Classification: E23, E27, F02, F17, F47 Terms of use: Documents in JEL

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“…-4% annual decrease in tariff rates (corresponding to the evolution of simple average tariffs between 1973 and 2007 in Deardorff and Stern, 1983). The elasticity observed in the 1970s can be reproduced only by introducing in the model the observed tariff cuts or alternatively a drop in trade costs.…”

Section: The Dynamic Baseline Calibrationmentioning

confidence: 99%

Value Added in Motion: Modelling World Trade Patterns at the 2035 Horizon

Fontagné

Fouré

2015

SSRN Journal

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We address in this paper the future geography of production, migration and energy at the world level, and the consequences for the largest European countries. We take scant account of the wide range of possible evolutions of the world economy in terms of technological progress and diffusion, education, demography including migrations and finally energy price and efficiency. Taking a 2035 horizon, we examine how world trade patterns will be shaped by the changing comparative advantages, demand, and capabilities of different regions, and what will be the implications in terms of location of value added at the sector and country level. We combine a convergence model fitting three production factors (capital, labour and energy) and two factor-specific productivities, alongside a dynamic CGE model of the world economy calibrated to reproduce observed elasticity of trade to income. Each scenario involves three steps. First, we project growth at country level based on factor accumulation, demography and migration, educational attainment and efficiency gains, and discuss uncertainties related to our main drivers. Second, we impose this framework on the CGE baseline. Third, we implement trade policy scenarios (tariffs as well as non-tariff measures in goods and services), in order to get factor allocation across sectors from the model as well as demand and trade patterns.

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Economic Effects of the Tokyo Round

Cited by 18 publications

References 8 publications

Opening a Pandora’s Box

Opening a Pandora’s Box

Opening a Pandora's Box: Modeling World Trade Patterns at the 2035 Horizon

Value Added in Motion: Modelling World Trade Patterns at the 2035 Horizon

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