2009年-世界发展银行全球_Border_Price_and_Export_Demand_Shocks_for_Developing_Countries_from_Rest-of-World_Trade_Liberalization_Using_the_Linkage_Model_28页_989kb

Summary of "Border Price and Export Demand Shocks for Developing Countries from Rest-of-World Trade Liberalization Using the Linkage Model"

Core Content

This document discusses the methodology used to simulate the effects of rest-of-world trade liberalization on developing countries using the World Bank's LINKAGE model. The focus is on analyzing border price shocks and export demand changes resulting from the removal of agricultural and trade policies, and how these are integrated into national computable general equilibrium (CGE) models to assess economic impacts.

Main Assumptions and Model Specifications

• The LINKAGE model is used to simulate the global economic impacts of removing agricultural price-distorting policies and trade policies.
• The model includes three production technologies for agriculture: crops, livestock, and all else.
  • Crops: Captures trade-offs between intensive and extensive farming.
  • Livestock: Captures trade-offs between extensive grazing and intensive ranch-fed farming.
  • All else: Traditional capital/labor substitution, with special nesting for energy use.
• Land supply is variable and region-specific, with elasticities defined for each region (Table 3).
• Factor elasticities are used to model substitution possibilities between inputs, including:
  • Elasticity across inputs (excluding sector-specific and energy inputs): 0.0
  • Elasticity between capital+energy bundle and labor: 1.0
  • Elasticity between capital and energy: 0.8
  • Elasticity between feed and land: 0.5
  • Other elasticities are specified for different sectors and regions (Table 3).
• Armington elasticities (substitution between domestic goods and imports) are used, with some regions having elasticities double the top-level (Table 3).

Shocks from Global to National Models

• Border price shocks are generated by removing all agricultural price-distorting domestic and border policies in the global model.
• The shocks are applied to single country models as "rest-of-world" reforms, i.e., global liberalization without the own-country liberalization.
• For agricultural and lightly processed food (excluding highly processed food, beverages, and tobacco):
  • All trade (import and export) taxes and subsidies are removed.
  • All farm input and output taxes and subsidies are removed.
• For other non-agricultural sectors:
  • Only trade (import and export) taxes are removed.
• The effects of these shocks are then compared with the outcomes of own-country liberalization using the same national model and agricultural protection rates.

Macro-Closure in the Linkage Model

• The model uses four closure rules to maintain consistency:
  1. Fixed balance of trade.
  2. Fixed regional investment.
  3. Fixed real government spending.
  4. Tax replacement to maintain net tax receipts in relation to net national income.
• The real exchange rate is adjusted to clear the current account, which can lead to export increases following a reduction in import tariffs.

Implementation of Global Results in Single Country Models

• The single country models are used to determine export supply behavior, while import demand changes are taken from the global model.
• The import price shocks are well proxied by exogenous price changes due to the flat import supply curves in global models.
• The export demand curve is defined by the slope (approximate elasticity of substitution among imports) and shift (fp), where:
  $$
  f p = p + q / \text{Elasticity}
  $$
  • $p$: percentage change in export prices
  • $q$: percentage change in export quantities

Key Features of the Linkage Model

• The numétaire is defined as the export price index of manufactured exports from high-income countries, set to 1 in the base year.
• Aggregate labor supply is fixed and fully mobile across all sectors, with no exogenous assumptions on rural/urban wage ratios.
• Aggregate capital supply is fixed and fully mobile across all sectors.
• Agricultural land supply is endogenous, with land classified as scarce or abundant based on elasticities (Table 3).

Conclusion

The study emphasizes the importance of integrating global policy reforms into national CGE models to better understand their economic impacts, particularly on agricultural markets, trade flows, and welfare outcomes. It highlights the use of the LINKAGE model and its comparative static approach to simulate the effects of removing agricultural and trade distortions, while maintaining macroeconomic consistency and model closure.

References

• The study is part of the Agricultural Distortions Working Paper series and is related to a broader volume on agricultural price distortions, inequality, and poverty.
• It draws on GTAP 7 data and distortions estimates from the World Bank's Agricultural Distortion research project.
• The LINKAGE model is calibrated to GTAP 7p5, with sectoral and regional concordances provided in Tables 1 and 2.
• The elasticity structure is detailed in Table 3, including both production and Armington elasticities.
• The price distortion structure for 2004 is outlined in Table 4, comparing GTAP 7p5 and amended rates from the World Bank project.

Tables Summary

• Table 1: Sectoral concordance between Linkage and GTAP Version 7.
• Table 2: Regional concordance between Linkage and GTAP Version 7.
• Table 3: Key elasticities in the Linkage model, including production and Armington elasticities, and land supply elasticities.
• Table 4: Price distortion structure for GTAP 7p5 and the World Bank's 2004 data.