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GTAP Resource #4115

"A sub-national version of the GTAP model for Italy"
by Standardi, Gabriele

In this paper we describe the general methodology used to build a sub-national version of the GTAP model for Italy. However, the methodology can be applied to other countries according to the data availability at the sub-country level. In this first version, we work with 10 sectors and 3 Italian macro-regions (North, Center, South). As a next step, the model will be extended to all 20 Italian regions and 57 GTAP sectors. At this stage, the aim is not to have a realistic picture of the policy effects but rather to understand how the model works and its potential contribution.
The motivations for such a work are important. First, few global CGE models exist at the sub-national level due to the difficulty to create mutually consistent social accounting matrixes for a large number of sub-national regions. Nevertheless, the trade/environmental policy at the world level may raise significant effects also at sub-country level, highlighting distributional issues that require consistent and differentiated policy actions.
Second, concerning issues such as climate change, a more detailed geographical localization represents an important tool to assess more properly the economic consequences of physical impacts. For example, given a physical impact at the local level, the economic effects are likely to be stronger in a specific sub-national region but it could also be interesting to analyse to what extent they interact with the other economies within the country and in the world. The potential to impose differentiated shocks within a country is one of the main strengths in this type of model.
In order to regionalize GTAP at sub-country level, the methodological approach implies two main tasks to be developed/accomplished. The first one is the database development and second one the model improvement.
Regarding the first task, the major effort in building a sub-national CGE database consists in estimating the trade flows across sub-national regions. Due to the lac...

Resource Details (Export Citation) GTAP Keywords
Category: 2013 Conference Paper
Status: Published
By/In: Presented at the 16th Annual Conference on Global Economic Analysis, Shanghai, China
Date: 2013
Created: Standardi, G. (4/12/2013)
Updated: Standardi, G. (7/10/2013)
Visits: 2,687
- Model validation and sensitivity analysis
- Other data bases and data issues
- The GTAP Data Base and extensions
- Europe (Southern)

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