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GTAP Resource #3778

"Dynamic Effects of an Economic Partnership Agreement: Implications for Senegal"
by Cissokho, Lassana

In this paper, I use a dynamic recursive computable general equilibrium to evaluate, for the economy of Senegal, the dynamic effects of an economic Partnership Agreement between West African countries and the European Union. The model identifies 28 activities, each producing one commodity, and counts four institutions: households, enterprises, the government, and the rest of world. The model separates activities from commodities, the former are the domestic production units, while the latter, similar to the domestic markets, buy goods from domestic and foreign producers, and allocate it between the domestic sales and exports. Households consume home and imported goods to maximize their inter-temporal utility; firms maximize their profit in a constant return to scale (CRS) framework; the government collects taxes to consume and make transfers; and they all have access to the international capital market where they can lend and borrow at the world interest rate. The dynamic of the model is ensured by population growth, which affect demands from consumers and the labor market; and capital accumulation. The model is calibrated using the 2004 social accounting matrix for Senegal. In the simulations, the liberalization scheme is designed to mirror the interim agreement signed by Côte d’Ivoire and Ghana. The effects described are the shifts from the baseline numbers. I find that the production of agricultural goods will decrease, affecting employment negatively, of unskilled labor in particular, since this sector is very labor intensive. In fact, employment drops by around 0.2 percent a year during the simulation period (2012-2030). GDP grows on average by 1.9 percent a year. The effects of the economic partnership agreement closely mirror the results of a free trade agreement between Senegal and the European Union, implying that a customs union between West African countries is not necessary to reap the benefits of the EPA for Senegal. The directions of these effects...

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland
Date: 2011
Created: Cissokho, L. (3/30/2012)
Updated: Cissokho, L. (4/3/2012)
Visits: 1,862
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