Partial- and General-Equilibrium Measures of Trade Restrictiveness

14 Pages Posted: 1 Nov 2010

See all articles by Peter Lloyd

Peter Lloyd

University of Melbourne - Department of Economics

Donald MacLaren

University of Melbourne - Department of Economics

Abstract

New partial-equilibrium forms of the Trade Restrictiveness Index and the Mercantilist Trade Restrictiveness Index have recently been used by the World Bank and others. In this paper we examine the bias in the partial-equilibrium forms due to the neglect of general-equilibrium effects. We propose “semi-general-equilibrium” measures that capture those general-equilibrium effects due to vertical input–output relations without the need for a computable general-equilibrium model. These measures also incorporate nontariff measures. Australian data are used to compute the semi-general-equilibrium measures. These estimates indicate that the partial-equilibrium forms generally underestimate the true value of the indices, and by a large margin in some cases.

Suggested Citation

Lloyd, Peter John and MacLaren, Donald, Partial- and General-Equilibrium Measures of Trade Restrictiveness. Review of International Economics, Vol. 18, No. 5, pp. 1044-1057, November 2010, Available at SSRN: https://ssrn.com/abstract=1699952 or http://dx.doi.org/10.1111/j.1467-9396.2010.00925.x

Peter John Lloyd (Contact Author)

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

HOME PAGE: http://melbecon.unimelb.edu.au/staffprofile/plloyd/home.html

Donald MacLaren

University of Melbourne - Department of Economics ( email )

Victoria 3010, 3010
Australia
(61) 3 8344-5035 (Phone)
(61) 3 8344-6899 (Fax)

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