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GTAP Resource #2423

"A COMPARATIVE ANALYSIS OF SHALLOW AND DEEP INTEGRATION OF CHINA AND INDIA INTO THE GLOBAL ECONOMY: A DISAGGREGATED ANALYSIS USING THE "TAPES" PARTIAL EQUILIBRIUM MODEL: RATIONALE AND MODELLING STRATEGY"
by Evans, H. David, Michael Gasiorek and Sherman Robinson


Abstract
"New trade theory" and the theory of "new regionalism" suggests that there may be significant gains arising from deeper regional and global economic integration that are much greater than the shallow integration covered by standard international trade theory. The potential chain of relations linking deep integration to economic performance is: shallow integration, deep integration, expanded trade, externalities and scale economies, productivity increases, improved economic performance. Note that, shallow integration is probably a necessary precursor to successful deep integration. Some of the links and consequent externalities are likely to be commodity/sector specific, whereas others will be broader.

Deep integration poses a set of major challenges to modellers. This exploratory paper focusing on China and India seeks to tease out and model some key aspects of deep integration. The first is a radical disaggregation of model datasets which is essential to capture trade in intermediates, a hall-mark deep integration. Second, it is argued that indices of Intra Industry Trade (IIT) could provide a useful summary indicator of the degree to which firms and sectors have undergone deep integration. Third, the high degree of disaggregation chosen (HS4) with nearly 1200 commodities dictates the use of a partial equilibrium model. This means that in the absence of readily obtainable estimates of domestic production at this level of disaggregation, only import demand is modelled on the import side. Standard tariffs and estimates of the ad valorem equivalents are included in the protective structure on the import and export demand side.


Resource Details (Export Citation) GTAP Keywords
Category: 2007 Conference Paper
Status: Published
By/In: Presented at the 10th Annual Conference on Global Economic Analysis, Purdue University, USA
Date: 2007
Version:
Created: Evans, H. (4/16/2007)
Updated: Batta, G. (9/27/2012)
Visits: 4,361
- Asia (East)
- Asia (South-Central)


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