Trade Theory in Computable General Equilibrium Models

Peter Dixon is Professor at the Centre of Policy Studies, Victoria University, Australia, and is known internationally for his work in CGE modeling. Together with colleagues at the IMPACT Project and CoPS, he created the ORANI model and its dynamic successor, MONASH. These models have been prominent in the Australian economic debate for 40 years and have been used as templates for the development of other models throughout the world. He is the principal author of the ORANI and MONASH books published in the North Holland Contributions series. In recent years he has led the development of the USAGE model of the U.S. which is used by the USITC and the departments of Commerce, Homeland Security, Agriculture and Transportation.Michael Jerie is Senior Research Fellow at the Centre of Policy Studies, Victoria University, Australia. His main research area is developing GEMPACK (General Equilibrium Modelling PACKage), a suite of programs for formulating, solving and interrogating economic models. He is the co-author of numerous GEMPACK documents which are used world-wide by CGE modelers.Maureen T. Rimmer is Professor at the Centre of Policy Studies, Victoria University, Australia. Her main area of expertise is model development and application. With Peter Dixon she is the co-developer of the MONASH model of the Australian economy. In the last fifteen years she has been a key contributor in the development, application, and documentation of USAGE. She has made major contributions in applications of the model to key policy areas such as the replacement of imported crude oil with domestically produced biofuels, legalization of unauthorized immigrants, and the effects of terrorism events on the U.S. economy.

• Chapter 1. Introduction: What’s in the Book and How to Read It.- Chapter 2. Armington, Krugman and Melitz as Special Cases of an Encompassing Model.- Chapter 3. Optimality in the Armington, Krugman and Melitz Models.- Chapter 4. Calibration and Parameter Estimation for a Melitz Sector in a CGE Model.- Chapter 5. Melitz equals Armington Plus Endogenous Productivity and Preferences.- Chapter 6. Illustrative GEMPACK Computations in a General Equilibrium Model with Melitz Sectors.- Chapter 7. Converting an Armington Model into a Melitz Model: Giving Melitz Sectors to GTAP.- Chapter 8. Summary and Concluding Remarks.