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GTAP Resources: Resource Display

GTAP Resource #5054

"Comparison of Welfare Results from Trade Liberalization in the Armington, Krugman and Melitz Models: Impacts with features of real economies"
by Balistreri, Edward J. and David G. Tarr


Abstract
Under a wide range of model features, we show that in response to a reduction in global trade costs, the global welfare gains are largest in the Melitz model, followed by the Krugman model, and smallest in Armington. Labor-leisure choice and intermediate goods are the most important features for differentiating results. We show that the optimal tariff is significantly lower in the monopolistic competition models, thereby moving policy away from protectionism. We are the first to consider multi-sector comparative-static welfare impacts of these market structures, while maintaining equal trade responses across the models consistent with a shared structural-gravity elasticity.

An updated version of this paper appears as:
“Welfare gains in the Armington, Krugman and Melitz Models: Comparisons grounded on gravity,” Economic Inquiry, Vol. 60 (4), 1681- 1703. Available at: https://doi.org/10.1111/ecin.13082.
Complementary online read-only access available at: https://onlinelibrary.wiley.com/share/author/PQIYVJFTAWI2UUR3YJA5?target=10.1111/ecin.13082


Resource Details (Export Citation) GTAP Keywords
Category: 2016 Conference Paper
Status: Published
By/In: Presented at the 19th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2016
Version: 1
Created: Balistreri, E. (4/15/2016)
Updated: Tarr, D. (2/19/2024)
Visits: 2,241
- Bridging CGE and new quantitative trade (NQT) literature
- Multilateral trade negotiations
- Non-Tariff measures in services
- Baseline development
- Model extension/development
- Model integration and coupling
- Model validation and sensitivity analysis


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