When A Rich Country Enters Into A Free Trade Agreement With A Poor Country

By October 15, 2021 Uncategorized No Comments

CGE models can be used to estimate the impact of a trade agreement on trade flows, labour, production, economic well-being or even the environment. They may examine the impact of the agreement on all countries concerned and shall be ex ante; That is, they are trying to predict the changes that would result from a trade agreement. General equilibrium models are based on input-output models that track how the output of one industry is an input for other industries. General equilibrium models use huge data inputs that reflect all the elements to be taken into account. [15] Third, Ricardo and other early economists based their theories on commodity trade, and they did not take into account trade in factors of production. Today, however, basic factors of production such as labor, capital, and technology are exchanged.

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