Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/46894 
Year of Publication: 
1999
Citation: 
[Publisher:] Institut für Weltwirtschaft (IfW) [Place:] Kiel [Year:] 1999
Series/Report no.: 
Kiel Working Paper No. 952
Publisher: 
Kiel Institute of World Economics (IfW), Kiel
Abstract: 
Most dynamic trade models assume steady state or balanced growth. This paper argues while this can be done in a single region model or a model without trade, the steady state assumption is problematic in a multi-regional setting with trade interactions. This paper shows the consequences of assuming a balanced growth path and discusses several problems which are connected to the calibration of recursive dynamic multi-regional trade models. Furthermore, it is demonstrated how different dynamic specifications of the base run path affect the results of a policy scenario by imposing the Kyoto Protocol. The simulations illustrate that a balanced growth path can not be maintained in a multi-regional trade model due to international trade spill-overs. It is shown that the model results and thus the assessment of climate policy options depend substantially on the dynamic specification.
Subjects: 
Growth of open economies
Steady-state
Multi-regional dynamic CGE Model
International environmental problems
JEL: 
C68
D58
F43
O41
Document Type: 
Working Paper
Document Version: 
Digitized Version

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