Value of WTO trade agreements in a New Keynesian model

Ganelli, Giovanni; Tervala, Juha

doi:10.1016/j.jmacro.2015.06.001

Cited by 10 publications

(11 citation statements)

References 43 publications

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“…In this section, we introduce a New Keynesian model of trade liberalization that is based on Ganelli and Tervala (2015). We go beyond their approach in that we allow for both tariff and non-tariff barriers, because the latter constitute the major barriers to trade between the US and the EU.…”

Section: Modelmentioning

confidence: 99%

“…However, because the demand functions of consumers are affected by trade barriers, there is an indirect effect on profits. As shown in Ganelli and Tervala (2015), the profits can be written as…”

Section: Firmsmentioning

confidence: 99%

“…We participate in the TTIP debate by employing a model structure that is different from the ones previously used in the TTIP literature: a New Keynesian dynamic stochastic general equilibrium (DSGE) model, based on Ganelli and Tervala (2015), which allows us to analyze transition dynamics of TTIP.…”

Section: Introductionmentioning

confidence: 99%

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Welfare effects of TTIP in a DSGE model

Engler

Tervala

2018

Economic Modelling

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Several studies have analyzed the trade and output effects of the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union, but our paper is the first attempt to study its welfare effects. We measure the welfare effect of TTIP as the percentage of initial consumption that households would be willing to pay for TTIP in order to remain as well off with TTIP as without it. The discounted present value of the welfare gain of TTIP, which leads to the elimination of tariffs and cuts in non-tariff measures by 25%, is in the range of 1% to 4% of initial consumption, depending on the parameterization. The welfare gain increases in the elasticity of substitution between domestic and foreign goods. The bulk of the welfare gain is caused by cuts in non-tariff measures. JEL Classification Numbers: F13; F41; E60

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Section: Modelmentioning

confidence: 99%

Section: Firmsmentioning

confidence: 99%

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Welfare effects of TTIP in a DSGE model

Engler

Tervala

2018

Economic Modelling

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“…Recent research by Ganelli and Tervala [68] adopted a New Keynesian general equilibrium model to show the welfare multipliers of public investment are positive at 0.8 suggesting the welfare gains of public infrastructure investment if implemented efficiently, could be substantial. Egert, Kozluk and Sutherland [69] used time series data for OECD countries to establish a positive causal association between infrastructure investment and growth with the impact greatest for sectors offering economies of scale, network externalities and competition-enhancing effects, with growth effects strongest in the telecommunications and energy sectors of the economy, Esfahani and Ramirez [52].…”

Section: Infrastructure Investment and Economic Growthmentioning

confidence: 99%

Capital Markets, Infrastructure Investment and Growth in the Asia Pacific Region

Regan

2017

IJFS

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This paper examines the relationship between infrastructure investment activity, capital market development, the role of public institutions and economic development in the Asia Pacific. It adopts a review approach drawing on empirical evidence over recent decades. Infrastructure is shown to be an important asset class playing a central role in a nation's output, growth, productivity and microeconomic performance. Infrastructure investment also requires investment and predictions of a widening gap in the future supply of infrastructure in the Asia Pacific will require new forms of capital from both traditional and new sources including wider use of private participation, institutional investment, asset recycling and revenue bonds. Capital market development is also necessary to raise long-term local currency finance and evidence suggests that progress with regional capital market integration is slow and a continuing reform agenda is required. The dividend for regional countries is the prospect of higher levels of economic growth with infrastructure investment, capital market development, and foreign direct investment shown to have a strong and positive association with growth. A crucial link in this association identified in the review is the part played by national and regional institutions in improving the efficiency with which infrastructure is managed and providing promising ground for further research where the importance of these links can be researched in greater depth.

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“…Therefore, we vary it between 0.5 and 2. The main innovation of Ganelli and Tervala (2015), relative to the existing models in the literature on trade agreements, was to show that the welfare effects of trade liberalization are sensitive to the Frisch elasticity, because an endogenous labor supply changes the underlying steady state.…”

Section: Robustness Checks: Varying Parametersmentioning

confidence: 99%

Welfare Effects of TTIP in a DSGE Model

Engler

Tervala

2016

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. paper is the first attempt to study its welfare effects. We measure the welfare effect of TTIP as the percentage of initial consumption that households would be willing to pay for TTIP in order to remain as well off with TTIP as without it. The discounted present value of the welfare gain of TTIP, which leads to the elimination of tariffs and cuts in non-tariff measures by 25%, is in the range of 1% to 4% of initial consumption, depending on the parameterization. The welfare gain increases in the elasticity of substitution between domestic and foreign goods. The bulk of the welfare gain is caused by cuts in non-tariff measures. Terms of use: Documents in EconStor mayJEL Classification Numbers: F13; F41; E60

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Value of WTO trade agreements in a New Keynesian model

Cited by 10 publications

References 43 publications

Welfare effects of TTIP in a DSGE model

Welfare effects of TTIP in a DSGE model

Capital Markets, Infrastructure Investment and Growth in the Asia Pacific Region

Welfare Effects of TTIP in a DSGE Model

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