Measures of trade openness using CGE analysis

Lloyd, Peter; MacLaren, Donald

doi:10.1016/s0161-8938(01)00096-5

Cited by 38 publications

(29 citation statements)

References 11 publications

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“…14 For instance, Lloyd and MacLaren (2002) use the Global Trade Analysis Project (GTAP) computable general equilibrium model to derive measures of trade openness.…”

Section: Resultsmentioning

confidence: 99%

Correcting the Size Bias in Trade Openness and Globalization Measures

Tang

2011

Glob. Econ. J.

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The trade intensity index, constructed as exports plus imports divided by GDP, is the most commonly used measure for trade openness and globalization. The index tends to indicate small countries are more open than large countries. We show that it is the inconsistence of two implicit assumptions in the index that leads to a size bias in the openness measurement. We use a combination of axiomatic and parametric methods to derive an unbiased, generalized index that embodies the conventional index as a special case. Correcting the size bias leads to very different results in relative openness measures between countries and in the estimates of the growth effect of trade openness.

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“…14 For instance, Lloyd and MacLaren (2002) use the Global Trade Analysis Project (GTAP) computable general equilibrium model to derive measures of trade openness.…”

Section: Resultsmentioning

confidence: 99%

Correcting the Size Bias in Trade Openness and Globalization Measures

Tang

2011

Glob. Econ. J.

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“…The empirical results of Halit (2003) show that trade barriers are positively and significantly associated with growth in the developing countries. In countrary, Lloyd and MacLaren (2002) argue that fair trade has spread in developing countries as initiative aimed at lifting poor smallholder farmers out of poverty by providing them with premium prices, availability of credit, and improved community development.…”

Section: Review Of the Related Literaturementioning

confidence: 99%

“…The documentation of positive relationship received support from the work by Billmeier and Nannicini (2007) (2008) which is another important key element. Measures of trade openness based on transformed uniform tariff equivalents derived from CGE analysis in Lloyd and MacLaren (2002) are some among others. Regarding terms of trade, the most advanced model is built on the "new open-economy macroeconomics, which synthesizes Keynesian nominal rigidities with inter-temporal approaches to open-economic dynamics, is an important effects of market structure on international trade" (Obstfeld, 2001, p. 109).…”

Section: Review Of the Related Literaturementioning

confidence: 99%

The Impact of Foreign Direct Investment on GDP Growth in East Africa

Urgaia¹

2017

CUBR

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This study empirically investigates the impact of foreign direct investment (FDI) on GDP growth in East Africa.The study employs annual panel data, obtained from the United Nations aggregate database for the selected countries in the region over the period 1970-2015. Unlike time series and cross-sectional, panel dataset reduces the identification problems in the presence of endogenous variables and estimates more robust and efficient parameters.This study uses methods of panel autoregressive distributed lag and random effect models combined with time scaling wavelet decomposition analysis in order to show a panel of short-, medium-, and long-run effects for the entire region and individual countries. Flowing FDI into developing countries is one of the most dynamic resources which play an important role in economic development by supplementing domestic savings in capital accumulation, creating innovation and income growth, transferring modern technology and employment generation, and providing a means for creating stable and long-lasting economic growth. Examining the correlation between FDI and economic growth, cannot identify the direction of causation using traditional approaches such as dynamic panel ARDL. However, the time scaling wavelet decomposition method can help to recognize the dynamic causality in time horizons. The Granger causality of wavelet analysis in a panel indicates that there are bi-directional dynamic relationships between real GDP and FDI in the short, medium, and long run. According to the empirical evidence, the long-run estimated coefficients reveal that a one percentage increase in FDI significantly increases the real GDP by approximately 0.16 percent in a panel of seven East African countries.

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“…Papageorgiou and Saam, 2008), international trade (e.g. Lloyd and MacLaren, 2002), and energy economics (e.g. McFarland et al, 2004), but the parameters are usually guesstimated and calibrated rather than based on empirical evidence.…”

Section: Preprint Submitted To Economics Lettersmentioning

confidence: 99%

On estimation of the CES production function—Revisited

Henningsen

2012

Economics Letters

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Highlights-We propose three solutions to avoid serious problems when estimating CES functions.-Removing discontinuities by using the limits of the CES function and its derivatives.-Circumventing large rounding errors by local linear approximations.-Handling ill-behaved objective functions by a multi-dimensional grid search. Highlights On Estimation of the CES Production Function-Revisited AbstractEstimation of the non-linear Constant Elasticity of Scale (CES) function is generally considered problematic due to convergence problems and unstable and/or meaningless results. These problems often arise from a non-smooth objective function with large flat areas, the discontinuity of the CES function where the elasticity of substitution is one, and possibly significant rounding errors where the elasticity of substitution is close to one. We suggest three (combinable) solutions that alleviate these problems and improve the reliability and stability of the results.JEL classification: C13, C51, D22, E23

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Measures of trade openness using CGE analysis

Cited by 38 publications

References 11 publications

Correcting the Size Bias in Trade Openness and Globalization Measures

Correcting the Size Bias in Trade Openness and Globalization Measures

The Impact of Foreign Direct Investment on GDP Growth in East Africa

On estimation of the CES production function—Revisited

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