Modelling multilateral trade liberalization in services
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Date
1995-07-06
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Abstract
We set out in this paper to examine the importance of various characteristics of services for the modeling of the effects of trade liberalization in services. We confine attention first to the characteristics that our own computable general equilibrium (CGE modeling framework has been designed to address variety scale and competition. Modifying it somewhat to enable us to distinguish the separate rules of these characteristics, we find that these particular characteristics ah apparently relatively unimportant for the conclusions that one reaches about the effects of trade liberalization on the economy. We then turned to a list of other characteristics that have been identified by others as distinguish service from goods and we ask whether these also need to be taken into account in such modeling exercises. With one exception we conclude the these characteristics ah unlikely to play an important role in future models of trade liberalization. The one exception is a character it's identified by either an Horn 1991 who saw producers of services as specializing their products to the particular needs of their customers. While it does not seem feasible at this time to incorporate the feature into a manageable CGE framework we do believe that it could have interesting and important implications for our understanding of the effects of trade liberalization if it were ever done.
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trade in services, trade liberalization