Armington Elasticities, Added Value of Products and Trade Welfare Improvement
Read
DownLoad |
| Title | Armington Elasticities, Added Value of Products and Trade Welfare Improvement
|
| Author | Ji Yinjie and Luo Laijun |
| Organization | School of Economics, Fudan University of China;School of Economics, Renmin University of China |
| Email | 18810327706@163.com；laijunluo@163.com |
| Key Words | Armington General equilibrium Trade Model; Armington Elasticity; Added Value; Trade Structure Upgrading |
| Abstract | In this paper, based on the Armington framework of general equilibrium trade, the short-term and long-term Armington elasticities of a total of 22 groups of representative goods under 16 categories which covers a wider range of industries are obtained by using three different estimation equation. Not limited to the sensitivity analysis method used by the domestic scholars, the author uses the improved Armington one-tier model to find out the relationship among the tariff, trade structure and trade welfare by means of numerical analysis for the first time. Research shows that: i) The lower the added value of the industry, the bigger the product elasticity, and the more homogeneous the products, while the higher the value-added industries, the greater the differences between products, and the higher the elasticity. With time goes on, the substitute of high value-added and low value-added products for imported goods will have a greater gap. ii) Under the conditions of unchanged elasticity of Armington abroad, the effect of import tariffs on low value-added products in terms of trade improvement is greater than on low value-added products. iii) The lower value-added goods have the higher optimal import tariff rate. A country tends to impose higher taxes on lower value-added goods while imposing lower taxes on higher value-added goods to maximize their national benefits. |
| Serial Number | WP948 |
| Time | 2015-11-03 |
|