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GTAP Resources: Resource Display

GTAP Resource #4138

"Opening a Pandora’s Box: Scenarios for World Trade Patterns at the 2035 Horizon "
by Fontagné, Lionel and Jean Fouré


Abstract
Economic projections for the world economy, in particular when building Computable General Equilibrium (CGE) baselines, are generally very conservative and hardly take into account the wide range of possible evolutions authorized by the underlying economic mechanisms considered. Against this background, we aim at projecting “open-minded” world trade trajectories. Considering the 2035 horizon, we examine how world trade patterns will be shaped by changing comparative advantages, demand and capabilities of the different regions. We combine a convergence model fitting three production factors (capital, labor and energy) and two factor-specific productivities with a dynamic CGE model of the world economy. We proceed for each scenario in three steps by firstly projecting growth at country level based on factor accumulation, educational attainment and efficiency gains. This framework (demographics, GDP, savings rates, factors and current account trajectories) is then imposed to the CGE as a baseline, and we finally implement trade policy scenarios (tariffs as well as non-tariff measures in goods and services), such that the model provides factor allocation across sectors as well as demand and trade patterns.
We consider three contrasted baseline-scenario combinations of the world economy based on economic history (WTO rounds), amplitude of factor accumulation with an emphasis on demographics and energy prices (as envisaged by versed institutions and with our own scenarios) and sensitivity to our parameters. We discuss the scenario assumptions and results with a precise decomposition of effects and by the light of the reproducibility of past stylized facts within our models, in particular regarding income elasticity of world trade. Our results point at extremely differentiated trajectories for the world economy within only two decades, leading to a wide range of foreseeable trade patterns which sheds the light on the multiple equilibria between economic growth, count...


Resource Details (Export Citation) GTAP Keywords
Category: 2013 Conference Paper
Status: Published
By/In: Presented at the 16th Annual Conference on Global Economic Analysis, Shanghai, China
Date: 2013
Version: 1
Created: Fouré, J. (4/14/2013)
Updated: Fouré, J. (6/10/2013)
Visits: 607
- Baseline development
- Multilateral trade negotiations
- Non-Tariff barriers


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