Value of WTO Trade Agreements in a New Keynesian Model
Object category:
Elektronische Ressource
Person/Institution:
Publisher:
International Monetary Fund
Ort:
Washington, D.C
Date:
2015
Language:
Englisch
Additional information
Abstract:
We revisit the question of the quantitative benefits of WTO trade agreements in a setup that is non-standard from the traditional trade policy point of view. We show that in a New Keynesian model, unilateral trade liberalization reduces welfare due to terms-of-trade deterioration, creating an incentive for a trade agreement. For realistic parameter values, the value of an agreement, which cuts tariffs by one percentage point, is 0.5% to 2% of consumption, much larger than in trade models. The intuition for this result hinges on some New Keynesian features of our framework, such as imperfect competition and endogenous labor supply
Object text:
Ganelli, Giovanni
Online-Ausg.
Online-Ausg.
Access and usage options
Administrative details
Created:
2023-04-14
Last changed:
2023-01-26
Added to portal:
2023-04-14
Feedback
Our data sets are in constant development. If you have additional information about this object or discovered an error, please write to us. Information on privacy policy