Clinton R. Shiells

Armington Models and Terms-of-Trade Effects: Some Econometric Evidence for North America

Elasticities of substitution among U.S. imports from Mexico, Canada, the rest of the world, and competing domestic production are estimated for twenty-two mining and manufacturing sectors, based on quarterly data for 1980-88. These elasticities will provide a benchmark for computable general equilibrium models of North American trade liberalization. The authors also find that estimated Armington elasticities are low and, therefore, researchers may want to reconsider the device of using high values of Armington elasticities in multicountry computable general equilibrium models to avoid large terms-of-trade losses associated with preferential trade liberalization.

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

Part I. Introduction: 1. Age models of North American free trade: an introduction Joseph F. Francois and Clinton R. Shiells Part II. Multisector Models: 2. A general equilibrium analysis of North American economic integration David W. Roland-Holst, Kenneth A. Reinert, and Clinton R. Shiells 3. The gains for Mexico from a North American free trade agreement - an applied general equilibrium assessment 4. Some applied general equilibrium estimates of the impact of a North American free trade area on Canada David J. Cox 5. Properties of applied general equilibrium trade models with monopolistic competition and foreign direct investment Drusilla K. Brown Part III. Sector-Focused Models: 6. Agriculture in the Mexico-US free trade agreement: a general equilibrium analysis Santiago Levy and Sweder van Wijnbergen 7. Wage changes in a U.S.-Mexico free trade area: migration versus Stolper-Samuelson effects Mary E. Burfisher, Sherman Robinson and Karen E. Thierfelder 8. The auto industry and the North American free-trade agreement Florencio Lopez-de-Silanes, James R. Markusen and Thomas F. Rutherford 9. Bilateral trade liberalization in quota restricted items: U.S. and Mexico in textiles and steel Irene Trela and John Whalley Part IV. Dynamic Models: 10. A dynamic dual model of the North American free trade agreement Leslie Young and Jose Romero 11. Towards a dynamic general equilibrium model of North American trade Timothy J. Kehoe

FDI and the Investment Climate in the CIS Countries

In view of disappointing levels of inward foreign direct investment (FDI), this paper examines capital flows into the Commonwealth of Independent States (CIS) countries and investigates the main impediments to a more favorable investment climate. Direct investment inflows have generally been related to natural resource extraction or energy transportation infrastructure projects, large privatization transactions, and debt/equity swaps to pay for energy supplies. Low FDI inflows despite strengthening macroeconomic performance has reflected a weak investment climate particularly owing to incomplete structural reforms. IMF staff working on the countries concerned cited burdensome tax systems, widespread corruption, extensive state intervention coupled with weak legal and regulatory frameworks, and incomplete structural reforms as the main impediments.

Transition Dynamics and Trade Policy Reform in Developing Countries

This paper emphasizes the relevance of classical transition dynamics for trade policy, particularly for developing countries. The empirical evidence from cross-country growth regressions points to important transitional growth effects related to trade policy reforms. The paper employs a simple growth model to examine these effects, formally developing the transitional dynamics and contrasting policy reforms in countries near steady state (developed countries) with countries far from steady state (developing). Policy reforms that appear identical in a static or steady-state framework can have a substantially greater impact on developing countries, once transitional accumulation effects have been accounted for.

Social Accounts and the Structure of the North American Economy

This paper presents the methodology for and results of the construction of a 26-sector social accounting matrix (SAM) for North America. We begin with the construction of three macro-economic SAMs and their integration into a North American macro-economic SAM. We then turn to the construction of a sectorally detailed SAM for the continent. Finally, we consider the structure of North American receipts and payments and the regional decomposition of multipliers.

Modeling a north American free trade area: Estimation of flexible functional forms

Modeling a North American Free Trade Area: Estimation of Flexible Functional Forms, - This paper provides estimates of the almost ideal demand system as applied to U.S. imports from Canada, Mexico, the rest of the world, and competing domestic output. Quarterly data over 1980-88 and for 19 mining and manufacturing sectors are used. Implications of adding up, homogeneity, symmetry, and negativity are considered. The econometric results should guide applied general equilibrium modeling of a North American Free Trade Area, especially with regard to potential terms-of-trade effects.ZusammenfassungZur Modellierung einer Nordamerikanischen Freihandelszone. Schätzung von flexiblen Funktionsformen. - Dieser Aufsatz liefert Schätzungen für das Konzept des ‘Fast idealen Nachfragesystems” (almost ideal demand system), das angewandt wird auf U.S.-Importe aus Kanada, Mexiko, dem Rest der Welt und auf die konkurrierende heimische Produktion. Benutzt werden Vierteljahresdaten aus den Jahren 1980 bis 1988 für neunzehn Bergbau- und Industriesektoren. Untersucht wird, ob die Adding-up-, Homogenitäts-, Symmetrie- und Negativitätsbedingungen erfüllt sind. Die ökonometrischen Ergebnisse sollten bedacht werden bei der Erarbeitung eines angewandten allgemeinen Gleichgewichtsmodells für eine Nordamerikanische Freihandelszone, insbesondere im Hinblick auf mögliche Folgen für die Terms of Trade.

Is Russia Still Driving Regional Economic Growth

This paper investigates whether the linkages between economic growth in Russia and growth in other countries in the region have weakened over time, particularly following the 1998 Russian crisis. It specifies an econometric model that includes standard growth determinants as well as Russian economic growth, and which allows for the effects of Russian growth to vary over time. The paper finds that Russian growth was indeed a significant determinant of regional economic growth prior to the Russian crisis, but that this link weakened significantly thereafter.

The Uruguay Round and Net Food Importers

This paper attempts to assess the incremental external financing requirements occasioned by changes in world food prices, due to implementation of the Uruguay Round Agreement on Agriculture, for a sample of 57 developing countries. Based on estimates of changes in food prices due to the Round obtained in previous studies, and on detailed data on food trade by country and commodity, the present study shows that the increase in net food import costs are likely to be smaller than 4 percent of net food imports over a period of six years for the countries considered, although for some of the larger trading nations the effect may exceed US

NAFTA liberalization and the role of nontariff barriers

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Dynamic Factor Price Equalization & International Income Convergence

Abstract Tariff protection between the North American economies is relatively low by world standards, having declined significantly with the NAFTA accords. Despite this apparent move toward a more liberal trade regime, however, nontariff barriers and other deterrents still exert a pervasive influence on trade. In this paper, a calibrated general equilibrium model is used to evaluate the opportunity cost of trade reducing nontariff barriers. Our results indicate that the United States, Canada, and Mexico could realize substantial gains from a more comprehensive approach to trade liberalization but that the process of adjustment to full liberalization differs in important ways from adjustment to simple tariff removal.