Estimating General Equilibrium Trade Policy Effects: GE PPML

By James E. Anderson, Mario Larch, Yoto V. Yotov. Social Science Research Network, 2015

66 citations recorded by the source corpus.

We develop a simple estimation procedure for general equilibrium (GE) comparative static analysis of gravity models. Non-linear solvers of estimated models are replaced by (constrained) regressions. Applied economists can more readily generate results, with more intuition about the working of the model. We illustrate with a worldwide border removal application using the Poisson Pseudo-Maximum-Likelihood (PPML) estimator in STATA, iterated to deliver conditional and full general equilibrium responses. The method works by fully exploiting the combined properties of structural gravity and PPML. Our procedures readily extend to a wide class of general equilibrium production models.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/9e287f4128f958f7c05bd668149ffc400dcdf8e9

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In Economics and Econometrics

Citations in the corpus

An Advanced Guide to Trade Policy Analysis: The Structural Gravity Model (2016, background): “Anderson et al. (2015a) demonstrate that gravity works very well with services sectoral data.”
On the widely differing effects of free trade agreements: Lessons from twenty years of trade integration (2019, unknown): “…of trade should grant relatively smaller concessions when they sign FTAs, because they are likely 2Aichele et al. (2014), Felbermayr et al. (2015), Anderson et al. (2015), and Carrère et al. (2015) each use econometric estimates of the average effect of past agreements to model the effects of…”
Estimating Trade Policy Effects with Structural Gravity (2016, unknown): “Anderson et al. (2015) demonstrate that gravity woks very well with services sectoral data.”