CGE methodology and trade-technology nexus redux: Illustrations and synthesis for modelling and policy analysis

Abstract

"Choice of appropriate methodological framework, like CGE, theoretical or econometric analysis, depends on the issue or theme that modellers research. Giving illustrations from the trade-endogenous growth literature, the chapter presents a semiendogenous growth model and its implementation in a computable general equilibrium GTAP model of trade. After reviewing general features of two CGE models, it illustrates an implementation to argue that the partial treatment of technology diffusion achieves the desired objective of mechanics behind trade-led technology flows. It offers a relatively big picture of trade-induced learning, and growth, contingent on absorption capacity and structural congruence. The model has room for improvement. However, the framework offers simple operational feasibility, but not at the cost of losing the inherent dynamics. ? 2014 by Nova Science Publishers, Inc. All rights reserved.