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GTAP Resource #5382

"International trade: a Kantian point of view"
by Salvatici, Luca and David Laborde

Despite all the efforts to improve our models both theoretically and empirically, it is fair to say that they still fall short of offering a comprehensive framework for measuring all the effects of international of trade. It would be interesting, though, to use them to compare trade with other possible means in order to achieve the same end. Assuming no market failures, trade expands the set of feasible allocations and enables Pareto superior outcomes to be achieved. Choosing a metric (e.g., GDP change) for the scale effect representing the feasible set, one should compare alternative exogenous changes that would achieve the same outcome: trade liberalization is certainly one of them but not the only one.

If international trade is not used to move outward the production possibility frontier, growth can come from having more labour, more capital, or from using that labour and capital more effectively, i.e., increasing total factor productivity. These simulation results could be interesting from two points of view. On the one hand, the size of the shocks necessary to replace the role played by international trade would give a sense of the realism of alternative options: for instance, how much land would each country need to produce domestically the same amount of nutrients presently consumed?

Resource Details (Export Citation) GTAP Keywords
Category: 2017 Conference Paper
Status: Published
By/In: Presented at the 20th Annual Conference on Global Economic Analysis, West Lafayette, IN, USA
Date: 2017
Created: Salvatici, L. (4/16/2017)
Updated: Batta, G. (4/16/2017)
Visits: 1,117
- Baseline development
- Food prices and food security

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