Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/46894
Authors: 
Springer, Katrin
Year of Publication: 
1999
Series/Report no.: 
Kiel Working Paper 952
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

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