General equilibrium analysis of the Eaton–Kortum model of international trade
نویسندگان
چکیده
We study a variation of the Eaton–Kortum model, a competitive, constant-returns-to-scale multicountry Ricardian model of trade. We establish existence and uniqueness of an equilibrium with balanced trade where each country imposes an import tariff. We analyze the determinants of the cross-country distribution of trade volumes, such as size, tariffs and distance, and compare a calibrated version of the model with data for the largest 60 economies. We use the calibrated model to estimate the gains of a world-wide trade elimination of tariffs, using the theory to explain the magnitude of the gains as well as the differential effect arising from cross-country differences in preliberalization tariff levels and country size. r 2006 Elsevier B.V. All rights reserved.
منابع مشابه
Nber Working Paper Series General Equilibrium Analysis of the Eaton-kortum Model of International Trade
We thank Jonathan Eaton, Tim Kehoe, Sam Kortum, Ellen McGrattan, Sergey Mityakov, Casey Mulligan, John Romalis, Kim Ruhl, Ed Prescott, Phil Reny, Rob Shimer, Nancy Stokey, Chad Syverson, Ivan Werning, participants in the December, 2003, conference at Torcuato di Tella and seminar participants at Cornell, Boston University, Brown, Harvard, Minnesota and Chicago for helpful discussions. Constanti...
متن کاملTrade Liberalization and International Competitiveness in Iran: An Application of Computable General Equilibrium (CGE) Model
Trade liberalization is often the core attention of foreign economic strategies in developing countries. Findings in the literature confirm a significant effect of free trade on developing economies through which the economic sectors benefit from technology transfer and spillovers and increasing production capacities and input productivity leading to international competitiveness. On the other...
متن کاملInvestigation and Comparison of the Welfare and Trade Effects of Iran Free Trade Agreement with Turkey, India and Pakistan countries: Computable General Equilibrium Model
Today, preferential and free trade agreements play an effective role in expanding trade in goods and services at the international level and as common practice in business planning and facilitating trade. The purpose of this article is to examine the trade and welfare effects of Iranchr('39')s free trade agreement with Turkey, India and Pakistan. For this purpose, using the Computable General E...
متن کاملInvestigating the Effect of Trade Shocks on employment in tradable and non-tradable sectors in Iran: A Dynamic Stochastic General Equilibrium Model (DSGE)
The aim of this paper is the analysis of trade shocks on tradable and non-tradable employment. To do so, a dynamic stochastic general equilibrium model is designed for Iran economy and the sectors of model are tradable, non-tradable and import. The variables related to foreign trade sector are nominal and real exchange rate, the law of one price gap and terms of trade. The structural parameters...
متن کاملThe Impact of Monetary and Exchange Policies on the Country’s Trade balance Fluctuation with the Approach of Dynamic Stochastic General Equilibrium (DSGE) models
This paper uses the framework of new Keynesian school and the literature of the Dynamic Stochastic General Equilibrium (DSGE) model to build a general model that can be estimated for Iran economy. By simulating this model, the effects of the implementation of monetary and foreign exchange policies through policy instruments including bank interest rate, central bank international reserves and t...
متن کامل