This hard-hitting research report presents a rigorous critique of the most widely used trade models based on computable general equilibrium (or CGE) models. The authors present concise analytical arguments explaining the fundamental weaknesses of typical CGE models. They show that these models tend to make unrealistic assumptions about the macro-economy and do not allow an accurate estimation of the welfare gains that trade liberalisation is supposed to induce. The report appeals for honest simulation strategies showing a variety of possible outcomes, which would enable policy-makers to assess the different scenarios for themselves.

Lance Taylor
Lance Taylor is the Arnhold Professor of International Cooperation and Development and Director of the Center for Economic Policy Analysis at the New School University. He has been a professor in the economics departments of Harvard and the Massachusetts Institute of Technology, as well as being a visiting professor at the University of Minnesota, the Universidade da Brasilia, Delhi University, and the Stockholm School of Economics. He moved to the New School in 1993.

Trade Liberalization and Fiscal Stability in Developing Countries: What Does the Evidence Tell Us?

Dutt, Devika

Gallagher, Kevin P.

Thrasher, Rachel D.

Global Policy, Vol. 11 (2020), Iss. 3 P.375

https://doi.org/10.1111/1758-5899.12803 [Citations: 0]

Garment Industry in Sri Lanka and the Removal of GSP Plus by EU

Bandara, Jayatilleke S.

Naranpanawa, Athula

The World Economy, Vol. 38 (2015), Iss. 9 P.1438

https://doi.org/10.1111/twec.12182 [Citations: 5]

The TTIP's Impact: Bringing in the Missing Issue

Myant, Martin

O'Brien, Ronan

(2015)

https://doi.org/10.2139/ssrn.2554355 [Citations: 1]

Analysing Fuel Subsidy and Taxation Reform with Input–Output Data

Beutel, Joerg

World Trade Review, Vol. 19 (2020), Iss. S1 P.s62

https://doi.org/10.1017/S1474745620000282 [Citations: 1]

Trade Liberalization and Economic Development

Sundaram, Jomo Kwame

von Arnim, Rudiger

Science, Vol. 323 (2009), Iss. 5911 P.211

https://doi.org/10.1126/science.1155337 [Citations: 14]

Trade liberalization, employment and inequality in India and South Africa

KUCERA, David

RONCOLATO, Leanne

International Labour Review, Vol. 150 (2011), Iss. 1-2 P.1

https://doi.org/10.1111/j.1564-913X.2011.00103.x [Citations: 14]

Macroeconomic Effects of 21stCentury Trade and Investment Agreements: The Case of the Trans-Pacific Partnership

Capaldo, Jeronim

Izurieta, Alex

Development and Change, Vol. 49 (2018), Iss. 4 P.951

https://doi.org/10.1111/dech.12404 [Citations: 5]

Libéralisation des échanges, emploi et inégalités en Inde et en Afrique du Sud

KUCERA, David

RONCOLATO, Leanne

Revue internationale du Travail, Vol. 150 (2011), Iss. 1-2 P.1

https://doi.org/10.1111/j.1564-9121.2011.00104.x [Citations: 0]

Liberalización comercial, empleo y desigualdad en la India y Sudáfrica

KUCERA, David

RONCOLATO, Leanne

Revista Internacional del Trabajo, Vol. 130 (2011), Iss. 1-2 P.1

https://doi.org/10.1111/j.1564-9148.2011.00103.x [Citations: 0]

Limiting Global Warming to Well Below 2 °C: Energy System Modelling and Policy Development

Economic Assessment of Low-Emission Development Scenarios for Ukraine

Chepeliev, Maksym

Diachuk, Oleksandr

Podolets, Roman

2018

https://doi.org/10.1007/978-3-319-74424-7_17 [Citations: 3]

Asian Growth and Trade Poles: India, China, and East and Southeast Asia

McDonald, Scott

Robinson, Sherman

Thierfelder, Karen

World Development, Vol. 36 (2008), Iss. 2 P.210

https://doi.org/10.1016/j.worlddev.2007.06.013 [Citations: 27]

Transition Towards High Share of Renewables in Ukraine: Linked Energy System and CGE Model Approach

Chepeliev, Maksym

Diachuk, Oleksandr

Podolets, Roman

(2018)

https://doi.org/10.2139/ssrn.3231225 [Citations: 0]

Agriculture reform and food crisis in Syria: Impacts on poverty and inequality

Rocchi, Benedetto

Romano, Donato

Hamza, Raid

Food Policy, Vol. 43 (2013), Iss. P.190

https://doi.org/10.1016/j.foodpol.2013.09.009 [Citations: 6]