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GTAP Resource #4532

"Linking GTAP to national country models: A tale of two approaches"
by Corong, Erwin

Understanding the national and distributional impacts of multi-lateral trade agreements often requires the combined use of global and national models. For example, the collection of country case studies in Hertel and Winters (2006) and Anderson, Cockburn and Martin (2010) have underscored the importance of following the effects of global shocks down to the household level.

Two methodologies have so far been used to link global and national country models. The first approach, applied in the collection of studies referred above, implements a top-down link in which simulation results from the global model—i.e., vectors of changes in exports prices, exports volume and import volumes—are used as shocks to a national model following the method of Horridge and Zhai (2006). On the other hand, Horridge and Filho (2003) provide an alternative but more complicated approach in which a national model of Brazil is fully integrated into the global GTAP model. In their application, the Brazilian part of the GTAP model is turned off and replaced by the Brazilian national model.

This paper contributes by first providing a technical overview of both approaches. To provide for a better comparison, we use the Philippines as a case study to analyse the potential effects of the ASEAN Free Trade Agreement (AFTA) on the Philippines. In each application, we shock the global GTAP model to simulate a complete tariff elimination scenario in the ASEAN region.

Resource Details (Export Citation) GTAP Keywords
Category: 2014 Conference Paper
Status: Published
By/In: Presented at the 17th Annual Conference on Global Economic Analysis, Dakar, Senegal
Date: 2014
Created: Corong, E. (4/15/2014)
Updated: Corong, E. (4/15/2014)
Visits: 1,353
- Model validation and sensitivity analysis
- Economic development
- Multilateral trade negotiations
- Asia (East)

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