Working Paper: CEPR ID: DP9083
Authors: Kym Anderson; Will Martin; Dominique van der Mensbrugghe
Abstract: This paper addresses three questions relating to the very extensive use of the GTAP global trade protection database: Are there additional price-distorting policy instruments worthy of inclusion in the base year? What is the appropriate counterfactual set of price distortions in the year of concern (such as when a proposed reform is expected to be fully implemented, as distinct from the base year)? And how are the price distortions (e.g. tariff rates) on individual products aggregated to the GTAP product groups? We show the estimated welfare effects of policies can change substantially when more-appropriate measures of distortions are used.
Keywords: Agricultural Protection; Growth; Tariff Aggregation; Trade Policy; Counterfactuals
JEL Codes: F13; F15; F17
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| accuracy of distortion measures (C52) | welfare estimates (I38) |
| removal of agricultural domestic and trade subsidies and taxes, as well as import tariffs (F13) | global economic welfare (D69) |
| trade policy reform (F13) | gains in developing countries (F63) |
| price-distorting policies (H31) | economic welfare (D69) |