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GTAP Resource #6633

"Regional Computable General Equilibrium Model of Japan and the Global Economy"
by Itakura, Ken and Tomohiro Iwamoto

In this study, we incorporated forty seven prefectures of Japan into a global computable general equilibrium (CGE) model. We treat prefectures as new sub-regions in the Global Trade Analysis Project (GTAP) database, along with the RCEP region and the rest of world. Input-Output (IO) tables of prefectures and Japan are aggregated to the 39 sectors to match with the GTAP database. Then, the IO linkages between production, international trade, and consumption are split by prefectures. Corresponding to the database extension, we modify the comparative static GTAP model. In the modified model, we add a new module of domestic trade of inflows and outflows of goods and services within Japan. To illustrate sub-regional impact of national trade policy change, we conduct a set of experimental simulations of the RCEP trade liberalization. All prefectures in Japan gains from the freer trade in terms of the positive impact on economic welfare. In contrast, regional real GDP of prefectures are mixed in effect where some prefectures gain and some lose. As the parameter value of substitution of domestic trade among prefectures increases, real GDP in Japan tends to decrease while economic welfare slightly increases. However, further examination of the simulation results, the modified database and the extended model should be warranted.

Resource Details (Export Citation) GTAP Keywords
Category: 2022 Conference Paper
Status: Not published
By/In: Presented during the 25th Annual Conference on Global Economic Analysis (Virtual Conference)
Date: 2022
Version: 0.1
Created: Itakura, K. (4/15/2022)
Updated: Itakura, K. (4/15/2022)
Visits: 683
- Model extension/development
- GTAP Data Base and extensions
- Preferential trading arrangements
- Asia (East)

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