Himics, Mihaly: Trade policy representation in applied equilibrium models. - Bonn, 2019. - Dissertation, Rheinische Friedrich-Wilhelms-Universität Bonn.
Online-Ausgabe in bonndoc: https://nbn-resolving.org/urn:nbn:de:hbz:5n-53280
urn: https://nbn-resolving.org/urn:nbn:de:hbz:5n-53280,
author = {{Mihaly Himics}},
title = {Trade policy representation in applied equilibrium models},
school = {Rheinische Friedrich-Wilhelms-Universität Bonn},
year = 2019,
month = jan,

note = {The success of the Uruguay Round of multilateral trade negotiations revealed the political viability and economic importance of global trade liberalization. Although subsequent multilateral negotiations have been less successful, many countries aim to further liberalize trade, often by negotiating regional free trade agreements. The further development of existing quantitative tools for economic impact assessment of trade policies, thus, seems as relevant as ever. This thesis improves the representation of trade policy instruments in global applied equilibrium models (AEM) reflecting on recent improvements in numerical algorithms and computational power, better statistical information at global scale and unresolved theoretical challenges. Regarding the ex-ante availability of trade negotiation details, we look at two extremes. First we consider that highly detailed information is available and use tariff line level data to extend existing AEMs. On the other extreme, we assess future trade agreements without such detailed information. Lacking detailed policy input data, we use broader negotiation objectives to design an exploratory policy analysis with a typical, large-scale AEM. Even if based on imprecise assumptions, such impact assessments still can provide crucial input for policy making. More so as trade policies interact with other areas of international cooperation, such as global efforts to combat climate change; interplays which have received increased public and scientific attention.
For both extremes of policy data availability, methodological improvements to AEMs are proposed. Assuming fully detailed information, a tariff aggregation method is developed that is consistent in terms of simulated welfare-implications while remaining invariant to geographical details on exporting countries. Consistent tariff aggregation eliminates the aggregation bias, but only in terms of one selected model outcome. To increase precision in more than one simulated impacts we also look for multi-purpose alternatives to consistent aggregation. Two multi-purpose aggregation approaches are presented with a focus on correcting for the following biases: (i) the substitution effect at the tariff line; (ii) the imperfect transmission of tariff cuts to domestic import prices (water in tariffs) and (iii) the interdependency of tariff rates and imported quantities under Tariff Rate Quota regimes. Concerning a lack of detail on (future) trade policies, we explore the contribution of the current EU trade agenda to global greenhouse gas mitigation efforts for agriculture. The agri-food sector is both a major emitter of non-CO2 gases and characterized by a higher level of border protection. In that setup, a simulation exercise with a large-scale partial equilibrium model (CAPRI) reveals potentially significant emission leakage impacts, and thus trade liberalization negatively contributes to unilateral emission mitigation efforts.
The thesis thus includes several empirical examples, demonstrating that the proposed improvements for trade policy modelling can be implemented in current, even large-scale, modelling systems, and they significantly improve simulation results. We also highlight some future challenges related to the assessment of trade agreements in a wider policy context such as within the trade-climate change nexus.},

url = {https://hdl.handle.net/20.500.11811/7980}

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