Specification Choice and Robustness in CGE Trade Policy Analysis with Imperfect Competition

Posted: 2 Jun 2004

See all articles by Dirk Willenbockel

Dirk Willenbockel

University of Sussex - Institute of Development Studies

Abstract

In order to contribute to a more comprehensive understanding of the robustness of the quantitative results of applied trade policy simulations to variations in the assumptions about firm conduct, this article provides a systematic synopsis of alternative formulations of imperfectly competitive supply behaviour in applied general equilibrium trade models and examines the sensitivity of simulated trade policy effects to the specification choice and calibration strategy within a prototype multi-country model. The analysis suggests in particular, that simulation results are generally far more sensitive to numerical specification choices at the calibration stage, than to the prior choice of firm conduct specification.

Keywords: Trade policy, imperfect competition, scale economies, computable general equilibrium models

JEL Classification: F12, C63, D58

Suggested Citation

Willenbockel, Dirk, Specification Choice and Robustness in CGE Trade Policy Analysis with Imperfect Competition. Available at SSRN: https://ssrn.com/abstract=552823

Dirk Willenbockel (Contact Author)

University of Sussex - Institute of Development Studies ( email )

Brighton
Falmer, Brighton, East Sussex BN1 9RE
United Kingdom

HOME PAGE: http://www.ids.ac.uk

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