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IMPERFECT COMPETITION IN THE CONTEXT OF AGM

IMPERFECT COMPETITION IN THE CONTEXT OF AGM. WHY IMPERFECT COMPETITION? REALISTIC ASSUMPTION FOR MANUFACTURING & SERVICES SECTORS GAINS FROM ECONOMIES SCALE (Harry & Cox, 1986). IMPERFECT COMPETITION IN GTAP. FRANÇOIS J. (1998, TECHNICAL PAPER 14)

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IMPERFECT COMPETITION IN THE CONTEXT OF AGM

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  1. IMPERFECT COMPETITION IN THE CONTEXT OF AGM • WHY IMPERFECT COMPETITION? • REALISTIC ASSUMPTION FOR MANUFACTURING & SERVICES SECTORS • GAINS FROM ECONOMIES SCALE (Harry & Cox, 1986)

  2. IMPERFECT COMPETITION IN GTAP • FRANÇOIS J. (1998, TECHNICAL PAPER 14) • ELBEHRI AZIZ & THOMAS HERTEL:“A Comparative Analysis of the EU-Morocco FTA vs. Multilateral Liberalization”; 2006.

  3. RELATIVELY EASY TO INCLUDE IC IN RELEVANT EQUATIONS OF GTAP MODEL DIFFICULT & INTENSIVE IN DATA AND CALIBRATION: Cournot model by Herfindhal index Cost Disadvantage Ratio (CDR) by gross plant-level sales ELBEHRI AZIZ & THOMAS HERTEL(2006)

  4. FTA “Deteriorating tot” Reduction of qo per firm in ind with high scale economies Trade diversion Increase unemployment of labour even with transfer from EU MTA “Lesser tot” Positive scale effect in the qo Trade creation Decrease unemployment of labour even without transfer from EU ELBEHRI AZIZ & THOMAS HERTEL(2006). MAIN CONCLUSIONS & FINDINGS

  5. PRESENTATIONS • TRADE DIVERSION • TOT • PRODUCTIVITY • TRANSFERS

  6. TRADE DIVERSION AND TRADE CREATION & DIVERSION IN THE CONTEXT OF AGM IMPERFECT COMPETITION TEAM 1: WOJTEK & J.L.H

  7. DEFINITION: grossly, TD can be defined as the displacement of more competitive imports from ROW in favour of partner countries. DIFFERENT MEASURES: compatibility index (Grav. Models); welfare analyses (AGE)--->Alloca. Effi. TRADE DIVERSION

  8. TWO MAIN SIMULATIONS: FTA & MTA SAME CLOSURE SYMMETRICAL SHOCKS: FTA:100% REDUCTION IN TARIFF FROM MOROCCO TO EU MTA: 100% REDUCTION IN TARIFF BETWEEN MOROCCO & ALL OTHER REGIONS NON AGRICULTURAL & NON FOOD COMMODITIES DESIGN OF OUR EXPERIMENT

  9. welfare contribution of Imports FTAw2 = 652 FTA = 442 442-652= -210 :

  10. MTAX Welfare Contribution

  11. Mvt Decomposion Equation MKTPRICES (-21) pms(i,r,s) = tm(i,s) + tms(i,r,s) + pcif(i,r,s); Equation DPRICEIMP (-18) pim(i,s) = sum(k,REG, MSHRS(i,k,s) * [pms(i,k,s)-ams(i,k,s)]) Equation IMPORTDEMAND qxs(i,r,s) = -ams(i,r,s) + qim(i,s) - ESUBM(i) * [pms(i,r,s) - ams(i,r,s) - pim(i,s)]; Equation CONT_EV_qimisr CNTqimisr(i,s,r) = MTAX(i,s,r)*[0.01*EVSCALFACT(r)]*[qxs(i,s,r) - pop(r)]; R031 TempCoeff 1 qxs 109.87 2 e1_ams 0 3 e1_qim -50.01 4 e1_ESUBM -26.89

  12. Differences mvh FTA pms 1 MOR -12.19 2 EU -16.20 3 ROW -0.72 FTAw2 pms 1 MOR -10.19 2 EU -21.20 3 ROW -10.62 pim= -18.6 pim= -19.2

  13. Conclusions

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