@article{Bchir:331050,
      recid = {331050},
      author = {Bchir, Mohamed Hedi and Decreux, Yvan and Guérin,  Jean-Louis and Jean, Sébastien},
      title = {Key Assumptions in AGE Trade Models: An Assessment using  the Mirage Model},
      address = {2002},
      pages = {30},
      year = {2002},
      note = {Presented at the 5th Annual Conference on Global Economic  Analysis, Taipei, Taiwan},
      abstract = {AGE models are among the main tools for assessing trade  policies, but the adequacy of a model and the relevance of  the results it delivers are wholly dependant on the  analytical framework and on the parameters chosen. Based on  the newly-built model Mirage (Modeling International  Relationships in Applied General Equilibrium, a model built  by the Cepii, with the collaboration of the ITC, Geneva),  this paper discusses the main aspects of these choices, and  illustrates their consequences for trade policy assessment  through various sensitivity analysis exercises, for  scenarios designed on purpose. The aim is both to reach a  better understanding of underlying mechanisms, and to  provide a greater transparency to the analysis of trade  policies through AGE models. The topics discussed include:   - Imperfect competition and product differentiation, for  which a new calibration procedure is proposed, in order to  take more consistently advantage of the results of  econometric studies, for a rather standard model of  horizontal product differentiation under oligopolistic  competition ?la Cournot.  - Dynamic setting, with special  attention devoted to the questions of production factors  mobility and of market structure's adjustment, and of their  interaction with trade evolutions. - Foreign direct  investments, in the light of the recent empirical results.  - Product demand, including the question of products  quality. - Externalities of trade and investment flows on  productivity. For each of these aspects, a specific context  (aggregation and scenario) is first chosen, so as to  enlighten the corresponding stakes. Various hypothesis and  parametrizations are then studied alternatively. The aim is  to assess how relevant each aspect is for trade policy  analysis, and how robust its modelling is.  The simulations  are carried out using the multinational model Mirage,  calibrated with the GTAP5 database, except for protection,  where the MAcMaps database (Market Access Maps developed by  ITC and CEPII on the basis of UNCTAD-TRAINS, AMAD,  UNSD-COMTRADE and WTO notifications) is used.},
      url = {http://ageconsearch.umn.edu/record/331050},
}