Tools for Exante Trade Impact analysis Skip to main content

Tools for Exante Trade Impact analysis

Issued in: 

Trade reform is complex to analyze, as it combines a variety of economic mechanisms at the same time: macro-economic effects, sectoral effects, in the short and long run. Besides, the impact of the reform depends crucially on the initial situation: tax levels, distortions between sectors of activity, trade, production and consumption patterns. In such a real world, theory cannot suffice to identify optimal policies. In depth empirical analysis based on a consistent and detailed picture of the concerned economies is essential.
The objective of this technical paper is to provide a review of the various tools used to ex-ante assessment of trade policies with a focus on three major categories: gravity models, partial equilibrium models and computable general equilibrium models, that are frequently used by ESCWA in assessing trade policy reforms in the Arab region