Modeling Trade Policy : Applied General Equilibrium Assessments of North American Free Trade

Applied general equilibrium (AGE) models have proven to be the tool of choice for analysing NAFTA. This collection contains the most important contributions to this burgeoning literature by many of the leading practitioners in the field. The volume contains a number of methodological advances in AGE modelling of trade policy.

Applied general equilibrium (AGE) models have received considerable attention and scrutiny in the public debate over the North American Free Trade Agreement (NAFTA). This collection brings together the leading AGE models that have been constructed to analyse NAFTA. A variety of approaches to modelling trade liberalization are taken in these studies, including multi-country and multi-sectoral models, models that focus on institutional features of particular sectors (agricultural, autos, steel, textiles and apparel) affecting multinational firms and rules of origin, and models with some inter-temporal structure. Further, by constructing stylized models, theoretical linkages have been identified that drive numerical results in the larger AGE models. The volume also assesses what can be learned about the likely economic effects of NAFTA from the collection of studies taken as a whole. Areas in need of further study have been highlighted.