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Agricultural Policy and Trade Reform

Potential Effects at Global, National and Household Levels

image of Agricultural Policy and Trade Reform

Widespread agricultural policy reform would undoubtedly improve global economic welfare but would also produce a complex pattern of economic winners and losers. Using a combination of global, national and household level analysis, this study examines such distributional implications focusing especially on differences in policy effects among countries and between different sectoral and household constituencies within countries.  Case study summaries are included for Brazil, Italy, Malawi, Mexico, and the United States.

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Overview of the GTAPEM Model

GTAPEM is a version of the basic GTAP model most of whose equations, parameters and base data are identical to those in the parent model. GTAP includes equations representing demand for goods for: final consumption, intermediate use and government consumption; demands for factor inputs, supplies of factors and goods, and international trade in goods and services. In the model, a representative regional household allocates regional income across three categories of final demand: private consumption, government expenditure, and savings. Private consumption is represented using a Constant Difference of Elasticities (CDE) functional form.

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