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GTAP Resources: Resource Display

GTAP Resource #4031

"Parameterization of Applied General Equilibrium Models with Flexible Trade Specifications Based on the Armington, Krugman, and Melitz Models"
by Oyamada, Kazuhiko

Comparing simulation results obtained by applied general equilibrium (AGE) models using intra-industry trade specifications based on Armington, Krugman, and Melitz models may be important in evaluating trade-related economic policies today. This paper explains how the Armington-Krugman-Melitz supermodel developed by Dixon and Rimmer can be parameterized, and demonstrates that only two kinds of additional information are required in order to extend a standard trade model to include Melitz-type monopolistic competition and heterogeneous firms. Further, it is shown how specifying too much additional information leads to violations of the model constraints, necessitating adjustment and reconciliation of the data. Once a Melitz-type model is parameterized, a Krugman-type model can also be parameterized using the calibrated values in the Melitz-type model without any additional data. One aim of this study is to motivate additional data collection and database development concerning the proportions of exporting firms established in each country. Sample code for the General Algebraic Modeling System (GAMS) has also been prepared to promote the innovative supermodel in the AGE community.

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Status: Not published
Date: 2013
Version: #2 (January, 2013)
Created: Oyamada, K. (12/7/2012)
Updated: Oyamada, K. (4/24/2013)
Visits: 912
- Calibration and parameter estimation
- Not Applicable

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Attached source code is a newer version than the one included in the pdf document.

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