Value of WTO Trade Agreements in a New Keynesian Model:
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Bibliographische Detailangaben
Beteilige Person: Ganelli, Giovanni (VerfasserIn)
Format: Elektronisch E-Book
Sprache:Englisch
Veröffentlicht: Washington, D.C International Monetary Fund 2015
Schriftenreihe:IMF Working Papers: Working Paper No. 15 / 37
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http://www.elibrary.imf.org/view/IMF001/22374-9781498372671/22374-9781498372671/22374-9781498372671.xml
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
Umfang:1 Online-Ressource (35 p)
ISBN:1498372678
9781498372671