Book Description

This collection of original essays makes a substantial contribution to the empirical analysis of trade policy and to the current debate on a new international economic order. They address policy from a strictly economic viewpoint, using computable general equilibrium models as analytical tools and assessing the strengths and weaknesses of these models, which are being increasingly used for policy analysis in international trade and other branches of economics. The essays all examine the effects of 50 percent tariff cuts on the various economies modeled. However, since some models are global (multicountry) and others are single country, such cuts can take several forms: unilateral, multilateral, or bilateral. The models show wide variation in their results. This points up the need for caution in using such models for rigid policy advice and for further improvement in data and techniques if trade modeling is to become effective. Nonetheless, the strength of such models in making explicit the implicit assumptions of policymakers and in providing a quantitative framework for trade policy evaluation is clearly revealed. T. N. Srinivasan, coauthor with Jagdish Bhagwati of Lectures on International Trade(MIT Press 1983) is Samuel C. Park Jr. Professor of Economics at Yale University. John Whalley, author of Trade Liberalization among Major World Trading Areas(MIT Press 1984) is Professor of Economics at the University of Western Ontario.