Premium
Global Supply Chains: Towards A Computable General Equilibrium Analysis
Author(s) -
Athukorala Premachandra,
Dixon Peter B.,
Rimmer Maureen T.
Publication year - 2018
Publication title -
economic papers: a journal of applied economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 19
eISSN - 1759-3441
pISSN - 0812-0439
DOI - 10.1111/1759-3441.12213
Subject(s) - computable general equilibrium , economics , welfare , supply chain , fragmentation (computing) , production (economics) , distribution (mathematics) , econometrics , mathematical economics , general equilibrium theory , scale (ratio) , computer science , microeconomics , mathematics , business , mathematical analysis , marketing , market economy , operating system , physics , quantum mechanics
Economists have analysed GSC s using pure theory, econometrics and input–output calculations. We now need a new type of CGE model to show how GSC trade affects welfare and its distribution between and within nations. The new model must recognise: fragmentation of production; scale economies; intermediate inputs that cross national borders multiple times embodied in products at different stages of completion; and decision‐making by global agents. We describe a prototype that incorporates these features and gives interpretable results not attainable with a standard CGE model. We discuss steps to move from the prototype to a policy‐relevant model.