Hoque, Serajul (2005): The impact of tariff reduction on Bangladesh economy: a computable general equilibrium assessment.
Download (205kB) | Preview
This paper explores the effects of tariff reduction on macroeconomic indicators and sectoral output in Bangladesh using a computable general equilibrium approach. The simulation results indicate that a reduction in all tariffs expands gross domestic product and generates employment, which suggests that tariff cuts have a short-run stimulatory effect on economic growth. The industries that experience the greatest positive effects on their output and employment are export-oriented industries. There are also positive effects on the suppliers to these industries. Lightly-protected industries that rely heavily on imported intermediate inputs exhibit robust expansion, benefiting from a cost reduction as a result of the removal of protection. However, highly-protected, import-competing industries suffer a contraction in output and employment as they face increased competition from imports due to the liberalisation of trade.
|Item Type:||MPRA Paper|
|Original Title:||The impact of tariff reduction on Bangladesh economy: a computable general equilibrium assessment|
|Keywords:||Trade liberalisation, computable general equilibrium model, Bangladesh|
|Subjects:||C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C68 - Computable General Equilibrium Models
F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations
|Depositing User:||Serajul Hoque|
|Date Deposited:||10. Aug 2009 07:05|
|Last Modified:||21. Feb 2015 07:54|
Armington, P. S. (1969) The Geographic Pattern of Trade and the Effects of Price Changes, IMF Staff Papers, XVI, July, pp. 176-199.
Dixon, P. B., Parmenter, B. R., Sutton, J. and Vincent, D. P. (1982) ORANI: A Multisectoral Model of the Australian Economy, North-Holland, Amsterdam.
Dollar, D. and Kraay, A. (2001) Trade, Growth and Poverty, Development Research Group, World Bank, Washington D.C.
Fontana, M., Wobst, P., Dorosh, P. and Zohir, S. (2003) Trade Policy, Agriculture and Poverty in Bangladesh: A General Equilibrium Analysis, Unpublished Manuscript, p. 25.
Government of Bangladesh (GOB) (2003a) Bangladesh Economic Review 2003, Economic Adviser’s Wing, Finance Division, Ministry of Finance, GOB, Dhaka, p. 51.
Government of Bangladesh (GOB) (2003b) Input Output Table 2000 for Bangladesh, Sustainable Human Development Unit, Planning Commission, Ministry of Planning, GOB, Dhaka.
Grossman, G. M. and Helpman, E. (1991) Innovation and Growth in the Global Economy, MIT Press, Cambridge, Massachusetts.
Harrison, W. J. and Pearson, K. R. (1996) Computing Solutions for Large General Equilibrium Models Using GEMPACK, Computational Economics, 9, 83-127. 9
Rodriguez, F. and Rodrik, D. (2000) Trade Policy and Economic Growth: A Skeptic’s Guide to the Cross-National Evidence, in NBER Macroeconomics Annual 2000 (Eds) B.
Bernanke and K. Rogoff, MIT Press, Cambridge, Massachusetts. World Bank (1991) World Development Report 1991, World Bank, Washington D.C.
World Bank (2002) Globalization, Growth, and Poverty: Building an Inclusive World Economy, Policy Research Report, World Bank, Washington D.C.
Yanikkaya, H. (2002) Trade openness and economic growth: a cross-country empirical investigation, Journal of Development Economics, 72, 57-89. 10