Agriculture Reference
In-Depth Information
deflation. In the remainder of the paper we investigate the relationship
between growth, labour relocation and macroeconomic policies in the
aftermath of the WTO accesson reforms.
Modeling the effects of China's trade policy reforms
Here we simulate the short-run effects of trade reforms n Chna whle
accountng for the mplcatons of servces trade commtments as well as
productvty changes assocated wth these reforms. As n Tyers and Rees
(Chapter 9) and Ianchovichina and Martin (2002a), we make allowance for
idiosyncratic trade policies, such as the duty drawbacks on imports used
in the manufacture of exported goods. And, as befits a short-run analysis,
we also allow for labour market rgdty and assocated departures from
full employment.
Following Yang and Tyers (2000), we use a comparative static global
macroeconomic model, within which the microeconomic (supply) side
is adapted from GTAP,
11
a mult-regon comparatve statc model n real
varables wth prce-takng households and all ndustres comprsng dentcal
competitive firms. To this microeconomic base are added independent
representations of governments' fiscal regimes, with both direct and
indirect taxation, as well as separate assets in each region (currency and
bonds) and monetary polces wth a range of alternatve targets. The detals
of the model are descrbed n Tyers and Rees (Chapter 9).
Simulated effects of accession policy reforms
A long-run outlook s requred n order that the expectatons of nvestors
can be formulated for short-run analysis—investors are assumed to take
changes n long-run returns on nstalled captal nto account n determnng
short run changes n ther nvestment behavour. Long-run results are also
of nterest n ther own rght.
The key elements of the long-run closure are as follows
there are no nomnal rgdtes (no rgdty of nomnal wages)
producton and consumpton elastctes of substtuton are chosen
at 'standard' levels to reflect the additional time for adjustment in
the long-run over the short run (Tyers and Yang 2001)
•
•
