Skip to main content

How reasonable are assumptions used in theoretical models? Computational evidence on the likelihood of trade pattern changes

Buy Article:

$43.00 plus tax (Refund Policy)

Abstract. 

In theoretical literature it is common to make the assumption that in a multi-country, multi-good world, the direction of trade (import and export by commodity) is predetermined and fixed for each good for each country. We consider a simple three-country, three-good, pure-exchange model with CES preferences. We compute free trade competitive equilibria, three-country non-cooperative Nash equilibria, and customs union equilibria for randomised parameterizations, and find that trade pattern changes between free trade and customs union equilibria in around 35% of cases.
No References
No Citations
No Supplementary Data
No Article Media
No Metrics

Keywords: F10; F13; F15

Document Type: Research Article

Affiliations: 1: International Monetary Fund 2: Department of Economics, University of Iowa 3: Department of Economics, University of Western Ontario

Publication date: 01 August 2006

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more