Work

Regional policy and the role of interregional trade data: policy simulations with a model for Norway

Year: 2018

Type: article

Abstract: Point data observations are often used to calibrate computable general equilibrium (CGE) models; however, results may be impacted by calibration of an Armington trade specification in a regional CGE (R-CGE) model. This paper calibrates an Armington trade specification with three differently estimated interregional trade data sets. It estimates interregional trade with one survey and two non-survey methods. The resulting three different trade data sets are each used to calibrate REMES, an R-CGE model for Norway. Two regional policy reforms are simulated with the three model versions to analyze the sensitivity of regional manufacturing sector output to trade data estimates. The results show that the trade data estimation method used for calibration significantly affects regional sector output results. Policy analysts and developers should be aware that calibrating an Armington trade specification with differently estimated interregional trade data may have a substantial influence on model results, and hence, on ex-ante and ex-post conclusions on policy impacts.

Source: Regional Studies Regional Science

DOI: 10.1080/21681376.2018.1522967

Authors: Ulf Johansen, Ruud Egging, Olga Ivanova

Institutions: Norwegian University of Science and Technology, Netherlands Environmental Assessment Agency

Language: English

Topic: Regional Economic and Spatial Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: gold

Estimated APC paid: $1,165

Funder: Norges Forskningsråd