A world trade model with bilateral trade based on comparative advantage

2006 ◽  
Vol 18 (3) ◽  
pp. 281-297 ◽  
Author(s):  
Anders Hammer Strømman ◽  
Faye Duchin
Keyword(s):  
Comparative Advantage ◽  
World Trade ◽  
Bilateral Trade ◽  
Trade Model

scholarly journals Theoretical and Empirical Characterization of Water as a Factor: Examples and Related Issues with the World Trade Model

Water ◽  
2021 ◽  
Vol 13 (4) ◽  
pp. 459
Author(s):  
Ignacio Cazcarro ◽  
Albert E. Steenge
Keyword(s):  
World Trade ◽  
Low Cost ◽  
Virtual Water ◽  
Considerable Change ◽  
Water Research ◽  
Trade Model ◽  
The World ◽  
Main Model ◽  
Selection Of

This article originates from the theoretical and empirical characterization of factors in the World Trade Model (WTM). It first illustrates the usefulness of this type of model for water research to address policy questions related to virtual water trade, water constraints and water scarcity. It also illustrates the importance of certain key decisions regarding the heterogeneity of water and its relation to the technologies being employed and the prices obtained. With regard to WTM, the global economic input–output model in which multiple technologies can produce a “homogeneous output”, it was recently shown that two different mechanisms should be distinguished by which multiple technologies can arise, i.e., from “technology-specific” or from “shared” factors, which implies a mechanism-specific set of prices, quantities and rents. We discuss and extend these characterizations, notably in relation to the real-world characterization of water as a factor (for which we use the terms technology specific, fully shared and “mixed”). We propose that the presence of these separate mechanisms results in the models being sensitive to relatively small variations in specific numerical values. To address this sensitivity, we suggest a specific role for specific (sub)models or key choices to counter unrealistic model outcomes. To support our proposal we present a selection of simulations for aggregated world regions, and show how key results concerning quantities, prices and rents can be subject to considerable change depending on the precise definitions of resource endowments and the technology-specificity of the factors. For instance, depending on the adopted water heterogeneity level, outcomes can vary from relatively low-cost solutions to higher cost ones and can even reach infeasibility. In the main model discussed here (WTM) factor prices are exogenous, which also contributes to the overall numerical sensitivity of the model. All this affects to a large extent our interpretation of the water challenges, which preferably need to be assessed in integrated frameworks, to account for the main socioeconomic variables, technologies and resources.

Elasticities of substitution and export demands in a world trade model

1973 ◽  
Vol 4 (4) ◽  
pp. 347-380 ◽  
Author(s):  
Bert G. Hickman ◽  
Lawrence J. Lau
Keyword(s):  
World Trade ◽  
Trade Model

Inter- and Intra-industry Trade Relations between Bangladesh and India: Empirical Results

2018 ◽  
Vol 7 (4) ◽  
pp. 280-292
Author(s):  
Anisul M. Islam
Keyword(s):  
Comparative Advantage ◽  
Relative Position ◽  
Bilateral Trade ◽  
Trade Deficit ◽  
Major Product ◽  
Global Trade ◽  
Industry Trade ◽  
Product Categories ◽  
Trade Relations ◽  
Economic Ties

Bangladesh and India are two neighbouring countries in South Asia having strong political, diplomatic, trade and economic ties with each other. This article reviews and updates on the inter- and intra-industry trade relationship between these two countries using more recent data. More specifically, it examines the relative position of the two countries in global trade followed by trends and patters of bilateral trade using aggregative data. At a disaggregate level, the commodity composition of Bangladesh exports to and imports from India by major product categories is examined focusing on the revealed comparative advantage (RCA) to review and update the degree of inter-industry trade. Further, the Grubel–Lloyd index (GLI; Grubel & Lloyd, 1975 ) is examined to measure the degree of intra-industry trade by major commodity groups. The article finds that India has a much stronger relative position in the global trade vis-à-vis Bangladesh. India is also found to dominate Bangladesh in bilateral trade, resulting in a very large and persistent trade deficit of Bangladesh with India. At a disaggregated level, the article finds that India has a comparative advantage in more products than Bangladesh and that the GLI shows that the degree of intra-industry trade is almost negligible between the two countries.

scholarly journals Volume, intensity and intra-industrial proportion of bilateral trade between Mexico and the United States 1981-2017

Norteamérica ◽  
1969 ◽  
Vol 15 (1) ◽  
Author(s):  
Dulce Albarrán Macías
Keyword(s):  
United States ◽  
Economic Integration ◽  
Vertical Integration ◽  
Growth Rates ◽  
World Trade ◽  
Bilateral Trade ◽  
The United States ◽  
Trade Intensity ◽  
Trade Volume ◽  
Production Processes

The aim of this paper is to characterize the bilateral trade between Mexico and the United States during the period 1981-2017, highlighting the effects of Mexico's accession to the GATT and the entry into force of NAFTA, as well as the entry of China into the WTO. Although there have been decelerations at some point, results show an increase in trade volume and, consequently, in the intensity of bilateral trade, but in the latter case with some falls resulting from the different growth rates of world trade. Intra-industrial trade, meanwhile, recorded sustained growth, which could reflect a greater vertical integration of production processes. Keywords: trade volume, trade intensity, intra-industrial trade, Grubel and Lloyd index added and corrected, economic integration.

VARIETIES OF INTERGOVERNMENTAL ORGANIZATION MEMBERSHIPS AND STRUCTURAL EFFECTS IN THE WORLD TRADE NETWORK

2018 ◽  
Vol 21 (02) ◽  
pp. 1850001 ◽  
Author(s):  
ZHENGQI PAN
Keyword(s):  
World Trade ◽  
Bilateral Trade ◽  
Graph Model ◽  
General Purpose ◽  
Intergovernmental Organizations ◽  
Random Graph Model ◽  
Intergovernmental Organization ◽  
Exponential Random Graph ◽  
The World ◽  
Joint Membership

To what extent does joint membership in intergovernmental organizations (IGOs) matter for bilateral trade? How and under what conditions do the various types of IGOs — economic, socio-cultural and general purpose — influence bilateral trade between their members? How do complex interdependencies in world trade matter? Existing research tends to examine aggregate joint IGO memberships and has done little to analyze how specific types of IGO membership matter in trade. Using a detailed IGO dataset and a novel network analysis approach called the temporal exponential random graph model, I assess the importance of three main IGO types — economic, socio-cultural and general purpose — in helping members to establish major trading ties. The results provide support for general purpose and socio-cultural IGOs and point to the importance of network phenomena such as popularity, activity and transitivity effects. Moreover, joint economic IGO memberships exhibit slightly more complex relations with bilateral trade. A robustness test reveals that preferential trade agreements are significant in fostering trade, while the World Trade Organization and other economic IGOs such as development banks are not. This paper presents a nuanced way of analyzing IGOs and provides the impetus for the study of complex interdependencies in international trade.

Softwood lumber trade and trade restrictions: gravity model.

2021 ◽  
pp. 142-173
Author(s):  
Xin-tong Li ◽  
Fatemeh Mokhtarzadeh ◽  
G. Cornelisvan Kooten
Keyword(s):  
Gravity Model ◽  
Bilateral Trade ◽  
Likelihood Method ◽  
Trade Restrictions ◽  
Softwood Lumber ◽  
Trade Model ◽  
Negative Effect ◽  
Bilateral Trade Flows ◽  
Pseudo Maximum Likelihood ◽  
Gravity Trade Model

Abstract A gravity trade model can be used to determine the effects of policy on bilateral trade flows. The gravity model is initially explained and then used to determine the effect that U.S. tariffs have on softwood lumber (SWL) imports from Canada, using information from the 2006 Softwood Lumber Agreement. Quarterly data for seven Canadian and three U.S. regions for the period 2007-2017 are used to estimate a gravity model of SWL trade. The model is subsequently expanded to include Japan and China as separate regions, and then as a combined China-Japan region. The model is estimated using OLS and a Poisson Pseudo-Maximum-Likelihood method for trade quantity and value. Findings indicate that: (1) the imposition of a countervailing and/or anti-dumping duty usually has a negative effect on Canada's physical exports, but not in all cases; (2) the value of softwood lumber trade decreases by 26% on average under a tax/tariff compared with no duties; (3) the tax/tariff has a smaller but still significant impact on Canadian exports when China and Japan are included, as SWL exports are diverted from the U.S.; and, not surprisingly, (4) duties affect the value of lumber exports to a much greater extent than quantity.

Modeling bilateral forest products trade.

2021 ◽  
pp. 43-82
Author(s):  
Craig M. T. Johnston ◽  
Brad Stennes ◽  
G. Cornelisvan Kooten
Keyword(s):  
Bilateral Trade ◽  
Forest Products ◽  
The United States ◽  
Programming Models ◽  
Trade Barriers ◽  
Trade Restrictions ◽  
Price Equilibrium ◽  
Softwood Lumber ◽  
Trade Model ◽  
Spatial Price

Abstract The focus in this chapter is on the development of mathematical programming models used to model bilateral forest products trade. Theoretical outlines are provided of a multi-region, single product trade model and of an integrated, multi-region, multi-product trade model. The objective function and constraints are described mathematically, while the analysis takes into account horizontal and vertical chains and the need to calibrate the model using observed trade flows. Data sources are discussed, and the GAMS code is provided for the uncalibrated and calibrated versions of the model. The Canada-U.S. softwood lumber dispute is the raison d'être for much applied work in modeling forest products trade, especially on Canada's side. In this chapter, we examine several spatial price equilibrium (SPE) trade models that are currently used to investigate the implications of trade barriers imposed on Canadian exports of softwood lumber to the United States. The reason we consider bilateral trade is so that we can determine the impacts of trade restrictions on various regions in North America. We begin in the next section by specifying a general but vertically integrated SPE trade model.

World Trade Patterns: an Empirical Study of Revealed Comparative Advantage Approach

1987 ◽  
Vol 43 (2) ◽  
pp. 138-161
Author(s):  
R. S. Tiwari ◽  
N. K. Bhushri
Keyword(s):  
Comparative Advantage ◽  
World Trade ◽  
Trade Agreements ◽  
The State ◽  
Future Prospects ◽  
Trade Patterns ◽  
Comparative Cost ◽  
External Demand ◽  
Comparative Cost Advantage ◽  
Policy Prescription

The theory of international trade emphasises that trade of an economy is determined by the factors arising from internal supply and external demand. The factors on the internal supply front constitute the elements like, cost of production, behaviour of internal demand, tariff, taxes, subsidies and overall considerations of comparative cost advantages. Factors on the external demand side include such variables as the price, quality, marketing of the products, trade and production policies of the buyer countries and the mutual trade agreements and relations between and/or among the supplier and demanding countries. Over a period of time it was found that the non-oil developing countries were facing severe constraints to augment their exports particularly in the developed market economies. These constraints were quite often mainly due to comparative cost disadvantages, lack of competitiveness, lack of commodity correspondence and so on. This leads us to examine the state of comparative advantage across products vis-a-vis products' competitiveness and commodity correspondence over time. In the context of the above, the first section examines the structure of world trade, whereas section second reveals the state of comparative cost advantage. Sections third and fourth look into the nature of the country's competitiveness and complementarities across the various products. The commodity correspondence ratio that reflects the future prospects of trade cooperation is dealt in section five, whereas, policy prescription in order to enhance trade cooperation has been discussed in section six—the concluding remarks.

Sign in / Sign up

Export Citation Format

Share Document