Modelling the Impact of Structural Policies on General Economic Equilibrium

Authors use the Computable General Equilibrium model to study the impact of a structural policy associated with declining import and export transaction costs in the economy of the Republic of Moldova. The results show that for most goods traded internationally, import prices are declining, which leads to increased consumer welfare. At the same time, the production capacity of the domestic economy is expanding and exporters are getting higher export prices, which boosts their competitiveness and leads to relatively faster growth of export deliveries compared to domestic deliveries. Benefits and costs of the scenario are quite evenly distributed territorially, although the well-being of households in industrialized urban areas is growing slightly faster compared to rural households. The obtained data confirm the international empirical results regarding the relevance of structural policies for long-term economic development.