02320cam a22002897 4500001000700000003000500007005001700012008004100029100002000070245016300090260006600253490004200319500001400361520105800375530006101433538007201494538003601566690008901602690008701691700002001778700001901798700001901817710004201836830007701878856003801955856003701993w10477NBER20170224042052.0170224s2004 mau||||fs|||| 000 0 eng d1 aHertel, Thomas.10aHow Confident Can We Be in CGE-Based Assessments of Free Trade Agreements?h[electronic resource] /cThomas Hertel, David Hummels, Maros Ivanic, Roman Keeney. aCambridge, Mass.bNational Bureau of Economic Researchc2004.1 aNBER working paper seriesvno. w10477 aMay 2004.3 aComputable General Equilibrium models, widely used for the analysis of Free Trade Agreements (FTAs) are often criticized for having poor econometric foundations. This paper improves the linkage between econometric estimates of key parameters and their usage in CGE analysis in order to better evaluate the likely outcome of a FTA for the Americas. Our econometric work focuses on estimation of the elasticity of substitution among imports from different countries, which is especially critical for evaluating the positive and normative outcomes of FTAs. We match the data in the econometric exercise to the policy experiment at hand. Then we sample from the distribution of parameter values given by our econometric estimates in order to generate a distribution of model results, from which we can construct confidence intervals. We conclude that there is great potential for combining econometric work with CGE-based policy analysis in order to produce a richer set of results that are likely to prove more satisfying to the sophisticated policy maker. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aC15 - Statistical Simulation Methods: General2Journal of Economic Literature class. 7aC68 - Computable General Equilibrium Models2Journal of Economic Literature class.1 aHummels, David.1 aIvanic, Maros.1 aKeeney, Roman.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w10477.4 uhttp://www.nber.org/papers/w1047741uhttp://dx.doi.org/10.3386/w10477