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GTAP Resources: Resource Display

GTAP Resource #1072

"Modelling of Small Countries in Economic Integration Processes: An Extension of the Armington Approach"
by Herok, Claudia, Hans van Meijl and Frank van Tongeren

Agricultural Policy is globally ubiquitous. The Common Agricultural Policy (CAP) of the European Union (EU) is probably one of the most complex system of agricultural policy instruments. Starting with market interventions to enhance production and thereby agricultural income in the mid sixties, it took only two decades to call for the first notable adjustments in form of milk quotas and budgetary stabilizers. From then on reform after reform has added instruments and goals to the CAP. A reliable analysis of the EU's policies in a global trade context has to take at least the most important agricultural instruments and institutions of the CAP into account. Regardless whether it deals with the CAP reforms, WTO negotiations or EU enlargement. Many analyses related to the CAP are carried out on the basis of the GTAP model which represents agricultural policies with the help of price wedges. How can the CAP instruments and institutions be represented more directly in the GTAP framework? What changes to the GTAP model and data base are necessary to switch from a representation of agricultural policies via price wedges to a direct implementation of instruments and institutions which is recognizable by policy makers? Does the direct modeling approach change the results significantly? To answer these questions the paper briefly reviews different approaches to implement the CAP in partial and general equilibrium models. After identification of suitable ways to model selected CAP instruments (direct payments, quantity restriction like milk quotas, intervention prices ) and the EU budget, the paper shows how to implement them in the GTAP model and data base. The final part of the paper discusses the results of agricultural trade liberalization scenarios based on the standard and extended version of GTAP which indeed differ significantly.

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
2002 Conference Paper
Status: Published
By/In: Presented at the 5th Annual Conference on Global Economic Analysis, Taipei, Taiwan
Date: 2002
Created: van Meijl, H. (5/1/2002)
Updated: Bacou, M. (7/16/2002)
Visits: 2,391
- Calibration and parameter estimation

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