An Advanced Guide to Trade Policy Analysis​: The Structural Gravity Model

2016 ◽  
Author(s):  
Yoto V. Yotov ◽  
Roberta Piermartini ◽  
José-Antonio Monteiro ◽  
Mario Larch
Keyword(s):  
Policy Analysis ◽  
Trade Policy ◽  
Gravity Model

Sensitivity analysis in an imperfect substitutes model of preferential trade

2014 ◽  
Vol 41 (5) ◽  
pp. 630-643 ◽  
Author(s):  
Kenneth A. Reinert
Keyword(s):  
Sensitivity Analysis ◽  
Policy Analysis ◽  
Trade Policy ◽  
Sensitivity Analyses ◽  
Formal Representation ◽  
Content Type ◽  
Conduct Sensitivity Analysis ◽  
Behavioral Parameters ◽  
Applied General Equilibrium Models

Purpose – The purpose of this paper is to develop a formal representation of the imperfect substitutes model (ISM) of partial equilibrium, trade policy analysis and to conduct sensitivity analysis on the behavioral parameters of the model. Design/methodology/approach – The paper develops an ISM in a manner that is conformable to more complex, applied general equilibrium models of trade policy analysis. Findings – The paper presents a set of sensitivity analyses on key behavioral parameters for a better understanding of the model's properties. Research limitations/implications – Sensitivity analysis on the values of behavioral parameters in ISMs needs to be conducted by trade policy modelers. Practical implications – The ISM is made more explicit here than in most representations, something that will be of great use to practitioners. Originality/value – While widely used in trade policy circles, the ISM is rarely explicitly formulated, nor the role of its behavioral parameters explored.

China’s foreign trade policy with OPEC member countries

2017 ◽  
Vol 10 (1) ◽  
pp. 61-81 ◽  
Author(s):  
Ehsan Rasoulinezhad
Keyword(s):  
Foreign Trade ◽  
Trade Policy ◽  
Gravity Model ◽  
Natural Resource ◽  
Bilateral Trade ◽  
Random Effect ◽  
Ordinary Least Squares ◽  
Foreign Trade Policy ◽  
Content Type ◽  
Opec Member

Purpose The purpose of this paper is to analyze specifications of the China’s foreign trade policy with Organization of the Petroleum Exporting Countries (OPEC) member countries. Design/methodology/approach The paper conducts three panel data estimations (fixed effect [FE], random effect [RE] and fully modified ordinary least squares [FMOLS]) based on the gravity model approach for bilateral trade patterns in natural resource and non-natural resource commodities between China and 13 OPEC members over the period of 1998-2014. Findings The findings reveal that the gravity equation fits the data reasonably well. The existence of long-term relationships between the bilateral trade flows and the main components of gravity model – GDP, income (GDP per capita), the difference in income, exchange rate, the openness level, distance and WTO membership – through the FE, RE and the FMOLS approaches was confirmed. The estimation results show that the trade pattern between China and OPEC member countries relies on the Heckscher–Ohlin theory, thus being explained by difference in factor endowments such as energy resources and technology. Originality/value To the best of the authors’ knowledge, this is the first attempt to examine the China’s foreign trade policy with the OPEC member countries through a gravity trade approach.

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