A Characterization of Equilibrium in Incomplete Markets with Real Assets

원동철 한국계량경제학회 2016 계량경제학보 Vol.27 No.2

A closed-form solution of equilibrium outcomes is generally unavailable in a general equilibrium model with incomplete markets (GEI model). Competitive equilibrium may not be directly computable from the aggregate excess demand functions because they need not be continuous in GEI economies. This paper provides a new characterization of competitive equilibrium in the GEI model by putting into a new perspective the sudden shrinkage of risk-sharing opportunities at a spot price that makes some of the assets redundant and thus, may cause the discontinuity of demand functions. The new characterization is based on the notions of `pre-GEI equilibrium' and `test equilibrium'. Pre-GEI equilibrium outcomes yield a computational equivalent of competitive equilibrium while test equilibrium outcomes may provide existential information on equilibrium. Competitive equilibrium for the GEI model is generically computable as an outcome of pre-GEI equilibrium without resort to any element of the Grassmann manifold.

A Characterization of Equilibrium in Incomplete Markets with Real Assets

Dong Chul Won 한국계량경제학회 2016 JOURNAL OF ECONOMIC THEORY AND ECONOMETRICS Vol.27 No.2

A closed-form solution of equilibrium outcomes is generally un-available in a general equilibrium model with incomplete markets (GEI model). Competitive equilibrium may not be directly computable from the aggregate ex-cess demand functions because they need not be continuous in GEI economies. This paper provides a new characterization of competitive equilibrium in the GEI model by putting into a new perspective the sudden shrinkage of risk-sharing op-portunities at a spot price that makes some of the assets redundant and thus, may cause the discontinuity of demand functions. The new characterization is based on the notions of 'pre-GEI equilibrium' and 'test equilibrium'. Pre-GEI equi-librium outcomes yield a computational equivalent of competitive equilibrium while test equilibrium outcomes may provide existential information on equilib-rium. Competitive equilibrium for the GEI model is generically computable as an outcome of pre-GEI equilibrium without resort to any element of the Grass-mann manifold.

한-GCC FTA의 경제적 파급효과에 관한 연구

윤승환(Seung-Hwan Yoon) 한국무역연구원 2021 무역연구 Vol.17 No.5

Purpose-Currently, the Korean government has not officially taken a position on the Korea-GCC FTA negotiations due to the Middle East s complicated political and economic situation. However, this study attempts to analyze the potential economic effects of an FTA between Korea and GCC member countries, taking into account the possibility of a resumption in the future. Design/Methodology/Approach-Using a global, multisector, computable-general-equilibrium (GTAP) model and GTAP database Version 10A (the most recent), this paper undertakes the identification of the economic impacts of a Korea-GCC FTA. The baseline scenario was designed using the World Bank s macroeconomic data, such as real GDP, population, labor, and capital from 2015 to 2019 to calculate future estimates. Policy scenarios were established by a (1) 90% reduction in tariffs on goods, (2) a 50% reduction in ad valorem tariff equivalents on services, (3) a 0.15% increase in TFP (total factor productivity), and (4) lastly, the above three scenarios were combined to see the effects of a Korea-GCC FTA. Findings Simulation results showed that real GDP in Korea (0.11%) and GCC member countries (0.13% ~ 0.46%) increased, indicating that a Korea-GCC FTA would have a positive impact on economic growth on both sides. The impact on welfare also reveals similar results to GDP, showing the largest increase in Korea (about USD 2.2 billion), followed by Saudi Arabia and UAE (about USD 2 billion and USD 1.6 billion, respectively). When looking at the effect of Korea s exports by industry, exports of automobiles and parts increased the most (about USD 1.5 billion), followed by the electronics (about USD 1.19 billion), machinery (about USD 1.05 billion), steel (about USD 1 billion), and petrochemical (about USD 420 million) industries, suggesting that overall exports are expected to increase in Korea s manufacturing industry. In the case of the petrochemical industry, exports to countries other than GCC member countries are expected to increase by approximately USD 3.9 billion, which is the largest benefit. Research Implications-This study suggests the justification and necessity of an FTA. Overall, positive effects will be expected in terms of real GDP, welfare, exports, and imports. In addition, if Korea and GCC member countries sign an FTA, exports of Korea s major manufacturing sectors will increase, and GCC member countries will see an increase in oil (crude oil) and gas exports, creating a win-win situation. As the industrial structure between the two sides is complementary, a synergy effect can be expected, and an FTA with GCC countries rich in natural resources such as oil and gas can enhance energy security.

The Impact of COVID-19 on the World Economy

Seung-Hwan Yoon,Jong-Hwan Ko 한국무역연구원 2022 The International Academy of Global Business and T Vol.18 No.2

Purpose – The coronavirus, which appeared in Wuhan, China in late 2019, has had immense ramifications on the global community. This paper undertakes to identify the economic impact of COVID-19, which has spread as a global pandemic, on the global economy and international trade. Design/Methodology/Approach – Using a global, multisector, computable-general-equilibrium model, this paper attempts to assess the potential economic impacts of COVID-19. The baseline scenario was set up using the World Bank’s macroeconomic data, such as real GDP, population, labor, and capital from 2015 to 2019, to calculate future estimates. Policy scenarios were established by (1) drops in employment rate (0.4~8.8%) of the analyzed countries, (2) a 5% increase in trade costs, (3) an 8.3% decrease in income reduction, and (4) lastly, a 50% fall of income in affected services industries. Findings – Results show that the GDP of all countries, including the United States and China, contracted, demonstrating that COVID-19 is not only limited to a specific country but also negatively affects the economic growth of all countries. Regarding international trade, exports and imports of all countries have declined due to the increase in trade costs resulting from COVID-19. However, in terms of the trade balance, each country exhibits slightly different patterns. Some countries, such as the United States, ran a trade surplus and others recorded a trade deficit. Although aggregate exports and imports around the world declined, the reason some countries recorded a trade surplus was that imports declined more than exports did, so it would be reasonable to view it as a ‘trade surplus in an economic recession’. Research Implications – Analytical results imply that the COVID-19 pandemic is not limited to a specific region and has a negative impact on countries around the world, signifying that the only way to lessen economic damage is to surmount COVID-19 as soon as possible.

기후변화 대응을 위한 EU 탄소국경조정메커니즘(CBAM)의 경제적 효과 분석

윤승환 한국무역연구원 2022 무역연구 Vol.18 No.1

Purpose – Countries around the world are focusing policy efforts on combating climate change and promoting long-term economic recovery, and major greenhouse gas emitting countries are joining the carbon neutrality declaration. To address the risk of carbon leakage, the EU introduced the CBAM(Carbon Border Adjustment Mechanism) in July 2021. The purpose of this study is to examine the potential economic effects of the CBAM on its major trading partners, including Korea, and to draw implications. Design/Methodology/Approach – Using a global, multisector, computable-general-equilibrium model and GTAP database Version 10A, this paper undertakes to assess the potential economic impacts of the CBAM. The baseline scenario was set up using the World Bank's macroeconomic data, such as real GDP, population, labor, and capital from 2015 to 2020 to calculate future estimates. Policy scenarios were established by (1) imposing 30 euros per ton of embedded emissions in the total amount of imports, (2) imposing 30 euros per ton of embedded emissions on five products covered by the CBAM in the European Commission’s July 2021 proposal, (3) imposing 30 euros per ton of CO contained in items that are subject to additional duties, and (4) lastly, the above scenarios 2 and 3 were combined to see the total effects of the CBAM. Findings – Simulation results showed that in the case of Scenario 1, wherein tariffs were imposed depending on CO emissions, intra-regional trade and production increased, resulting in a significant growth in consumer welfare in the EU (approximately $12.1 billion). Except for Japan, all major trading partners decreased overall, although there were disparities in size. In particular, China (about $10.9 billion), Russia (about $ 7.1 billion), and India (about $4.2 billion) reported significant drops in consumer welfare. Korea has exported an annual average of about $53.7 billion to the EU for the past six years, with items subject to the CBAM accounting for around $4.17 billion, or 7.8% of total exports. Of these items, iron and steel with a value of about $3.65 billion, accounting for about 87.3% of the total should be a source of concern for the Korean government and the steel industry. According to findings, the steel industry’s exports to the EU are likely to drop by 0.99 percent, resulting in a loss of nearly 310 million euros in exports (about 360 million US dollars). Research Implications – This study is meaningful in that it provides reference data to Korean industries that can be directly affected by the CBAM, which has already been introduced and is about to be implemented. For some export industries like the steel industry, in particular, it is necessary for the Korean government to actively support low-carbon technology innovation and accelerate the transition to a low-carbon economy.

미중 무역전쟁과 코로나19의 파급효과 분석

윤승환 ( Seung-hwan Yoon ),안세화 ( Se Hwa Ahn ) 아시아.유럽미래학회 2021 유라시아연구 Vol.18 No.3

본 연구는 트럼프 정부 출범 이후 촉발된 미중 무역 전쟁과 2020년 초에 중국 우한에서 발현되어 세계적 대유행으로 확산된 코로나19가 세계 경제와 국제무역에 미칠 영향을 추정하고 이에 따른 시사점을 도출하고자 시도되었다. 분석 결과, 미중 무역 전쟁은 미국과 중국 양 당사국 모두에게 실질 GDP를 감소시켰고 기타 다른 국가들에게는 GDP를 증가시키는 결과를 초래했다. 하지만 그 규모는 매우 미미하여 미국의 보호무역주의 정책 실효성에 의문이 들 정도이다. 여기에 코로나19 대유행이 겹치자 미국을 포함한 모든 국가들의 GDP가 감소한 것으로 나타났는데 그 중 미국과 ASEAN의 GDP가 좀 더 큰 폭으로 감소하였고 이는 실업률의 급격한 증가가 주된 원인으로 보인다. 그리고 미중 관세 전쟁보다도 코로나19 대유행의 경제적 피해가 훨씬 더 크게 나타나 가능한 빠른 시일내에 코로나19 대유행을 극복하는 것만이 경제적 피해를 최소화할 수 있다는 것을 시사해 주고 있다. 이를 극복하기 위한 각 국의 경기부양책은 일부 국가를 제외하면 미중 무역전쟁과 코로나19 대유행과 같은 이중고(double whammy)로 인한 피해를 완전히 극복하지는 못하더라도 어느정도 완화시키는 효과가 있는 것으로 나타났다. 미국과 중국이 관세를 인상했을 때 국제 교역과 무역 수지는 양국 모두 수출입이 감소세를 보였으나 수출보다 수입 감소 규모가 상대적으로 더 커 무역수지 흑자를 기록하였다. 하지만 코로나19 대유행의 경우 분석대상 국가 모두 수출입이 감소하였지만 국가마다 감소 규모와 방향이 다르게 나타나면서 무역수지에도 차이를 보였다. 소비 지출의 경우, 미중 무역 전쟁 시나리오의 경우 양국 모두 소비 지출이 감소한 것으로 나타났지만 기타 다른 국가들에서는 미미하지만 증가한 것으로 나타났다. 코로나19 대유행의 경우 모든 국가들의 소비지출이 감소하였는데 중국만 증가한 것으로 나타나 실업률 감소 규모가 상대적으로 작아 소득도 유지될 수 있었고 이로 인한 소비 지출이 늘어난 것으로 보인다. 부문별 산출을 살펴보면, 미중 관세 전쟁과 코로나19 대유행에 따른 이중고를 가정한 시나리오의 경우, 중국과 ASEAN을 제외한 모든 국가들에게서 제조업에 비해 서비스 산업의 산출량이 전반적으로 좀 더 큰 폭으로 줄어든 것으로 나타났다. 분석의 현실성을 높이기 위해 각 국의 실제 실업 변화율을 반영하였는데 각 국의 실업률 변동 격차가 원인으로 보이며 각 국가의 경제 및 산업 구조에 따라 실업률 증가에 대한 충격 반응이 달리 나타난 것으로 보인다. 이는 각 국가의 경제 운용에 있어 고용 유지가 산업별 산출량에 상당한 영향을 미칠 수 있다는 것을 보여주고 있다. 특히 자영업자 비중이 비교적 높은 서비스 산업(음식 숙박업, 여행 및 관광업, 문화 관광업 등)의 산출량이 상당한 규모로 감소함에 따라 이들 서비스 산업 종사자들의 타격이 그만큼 클 것으로 보인다. 또한 코로나19 대유행으로 인한 실업 증가가 가계 소득 감소, 소비 지출 감소, 결과적으로 생산 감소로 이어지는 만큼 고용 유지에 필요한 지원책을 강구할 필요가 있으며 제조업보다 더 큰 피해를 입은 서비스업 종사자들을 위한 지원도 필요할 것으로 보인다. 총평하면, 미국의 보호무역주의 대외통상정책(일방적 관세인상)은 실효성에 의문이 들 만큼 효과가 미미하였고 실제 미중 양국에 부정적인 영향을 미쳤다. 또한, 미중 무역 전쟁으로 인한 피해보다는 코로나 19로 인한 피해가 훨씬 더 크게 나타나 가능한 빠른 시일내에 코로나19 대유행을 극복하는 것만이 경제적 피해를 최소화할 수 있는 유일한 방법이며 특히, 코로나19로 인한 일자리의 급격한 감소가 다른 요인보다도 가장 큰 피해를 초래한 것으로 볼 수 있어 그만큼 고용 유지가 경제 운용에 매우 중요하다는 점을 시사해 주고 있다. 미중 무역 전쟁이 양국 간 합의에 따라 현재 소강상태에 있지만 다시 재현될 가능성을 배제할 수 없고 코로나19 대유행도 올해 안에 진정될 가능성은 낮아 보인다. 그럼에도 불구하고 전세계 경제가 지속적으로 성장하기 위해서는, IMF의 정책 권고처럼, 각 국가의 경제활동이 정상화될 때까지 정책적 지원을 지속할 필요가 있으며 코로나19 대유행이 한시바삐 극복될 수 있도록 모든 국가의 백신 접근성 제고를 위해 국제 공조를 강화해야 할 것이다. Using a global, multisector, computable-general-equilibrium model, this paper undertakes to identify the economic impact of the US-China trade war initiated by the Trump administration and the impact of COVID-19, which spread as a global pandemic in 2020, on the global economy and international trade. Analytical results reveal that the US-China trade war had a negative effect on both the U.S. and China and resulted in an increase in real GDP for the rest of the world. But the effect of the protectionist policy implemented by the U.S. was very minimal, raising questions about the effectiveness of the policy. When COVID-19 struck the world, the GDP of all countries, including the United States, decreased. Among them, the GDP of the United States and ASEAN fell more sharply, and the rapid increase in the unemployment rate seems to be the leading cause. In addition, the economic damage arising from the COVID-19 pandemic was much greater than that of the US-China trade war around the world, suggesting that overcoming COVID-19 as soon as possible is required to minimize economic damage. Each country’s economic stimulus packages were found to have a mitigating effect to some extent, with the exception of some countries, even if the damage caused by the US-China trade war and the COVID-19 pandemic could not be completely reversed. Regarding the impact of each scenario on international trade and trade balance, when the U.S. and China raise tariffs, both the U.S. and China show a decrease in both exports and imports. Still, the extent of the drop in imports is even greater than in exports, leading to a surplus in the trade balance. In the case of the COVID-19 pandemic, exports and imports decline in all countries, but the scale and direction of the decline are different for each country. The U.S. records a trade surplus, but China shows otherwise. In the case of private consumption expenditure, which is closely related to income, both countries’ expenditure decreases when tariff hikes by the U.S. and China. However, in all countries except the U.S. and China, consumption expenditure increases, albeit minimally. Consumption in all countries decreases due to COVID-19, albeit variously. Only in China does consumption expenditure increase, in this scenario by 0.98% to 2.2%, suggesting that economic disruption caused by COVID-19 is relatively small. Compared to other countries, as the decline in the unemployment rate is also relatively small, income most likely could be maintained, leading to increased consumption. In terms of the sectoral output in each country, in the case of scenario 5, assuming the double whammy of the US-China trade war and the COVID-19 pandemic, overall production of the service industry significantly decreases compared to that of the manufacturing industry. In particular, a decline in the service industry’s output is experienced in all countries except China and ASEAN. In order to reflect the damage caused by COVID-19 as realistically as possible in the model, the actual unemployment data of each country is used; however, the difference in the absolute terms of the unemployment rate in the scenarios seems to provide these results. Also, depending on each country’s economic and industrial structure, the shock response to the drop in the employment rate appears to be different. This suggests that job security has a significant impact on each country’s economy. In particular, the output of service industries (accommodation & food, transport, travel and tourism, recreation and leisure activities) with a relatively high proportion of self-employed workers reflects a significant decline, which is expected to impact these self-employed workers severely. Besides, as the increase in unemployment caused by COVID-19 has led to a decrease in household income, decrease in consumption expenditure, and consequently decrease in production, seeking measures to maintain job security and support for service industry workers who have suffered more damage than manufacturing industry workers is advisable.

정부 복지 정책의 평가 모형 : Welfare Measures of Taxes and Subsidies with Externalities in Computational General Equilibrium Model 계측 기능 균형 모델을 통한 정부 조세·보조금의 복지 측정

조원권 우송대학교 1997 우송대학교 논문집 Vol.2 No.-

본 논문은 지방 또는 중앙 정부가 지역 주민의 후생을 극대화하기 위하여 어떠한 정책수단을 활용하여야 할 것인가에 대한 문제를 제기하고 이러한 정책을 평가할 수 있는 모델을 설정함에 그 목적이 있다. 본 논문에서는 지역에서 발생하는 외부성(예. 공기오염, 교통등등)에 대한 여러 정책 수단에 따른 지역 주민의 후생 변화를 측정할 수 있는 이론적 틀을 제공하고자 하였다. 가장 최신의 이론이라 할 수 있는 Computational general equilibrium model을 적용하였는데 이 모델에서는 공기 오염에 의한 외부성과 외부성을 줄이기 위한 기술혁신등이 지방정부수준에서 모델내에서 명확하게 고려될 수 있다는 장점이 있다. 이 일반균형모델의 틀안에서 수요와 공급이 수학적으로 설정되어 소비자 또는 지역 주민의 정책 변화에 따른 후생 변화가 Compensation Variation(CV) 와 Equivalent Variation(EV)로 측정이 가능하다. This paper addresses the question: How should a state or central government choose the policy level in order to maximize its resident's welfare. We develop an analytical framework for assessing welfare change of state or regional residents from various policy schemes concerning externalities. We have constructed a computational general equilibrium model in which pollution externalities and abatement technology are incorporaed explicitly at state level. Demand and supply sectors are formally modeled mathematically within general equilibrium framework in which consumer's welfare change can be measured a compensation and equivalent variations.

The Economics of Conflict and Cooperation in the Asia-Pacific: RCEP, CPTPP and the US-China Trade War

Park, Cyn-Young,Petri, Peter A.,Plummer, Michael G. Korea Institute for International Economic Policy 2021 East Asian Economic Review Vol.25 No.3

The Regional Comprehensive Economic Partnership (RCEP) agreement, signed in November 2020, comes shortly after the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force and the US-China Trade War escalated. We use a computable general equilibrium model to assess the long-term effects of these three developments on income, trade, economic structure, factor returns and employment across the world, and especially in Asia-Pacific countries. The results suggest that RCEP could generate income gains that will be almost twice as large as those of the CPTPP, and that the two agreements together will largely offset the substantial negative effects of the US-China Trade War for the world as a whole. All three policy developments, but especially RCEP, will deepen East Asian production networks and will raise productivity and increase wages and employment in much of East Asia. At the sectoral level, regional trade in non-durable and durable manufactures will experience the most growth.

The Impact of Foreign Direct Investment on the Production Networks between China and East Asia and the Role of the USA and the Rest of the World as Final Markets

Jing Zhou,María C. Latorre 연세대학교 동서문제연구원 2014 Global economic review Vol.43 No.3

A three factor, four region and 15 sector computable general equilibrium (CGE) model is used to study the impact of foreign direct investment (FDI) accruing to China. We focus on the sectors of Electronics, Machinery and Textiles which account for 55.4% and 40% of Chinese overall exports and imports, respectively. Our data confirm the existence of production networks between China and East Asia and the role that the USA and the rest of the world (ROW) play as final markets. Based on these differentiated geographical roles and on the contrasting production technologies, we offer an in-depth analysis for macro- and micro-variables across the four regions.

The Impact of Trade Liberalization on Water Use: A Computable General Equilibrium Analysis

( Jian Zhang ),( Maria Berrittella ),( Katrin Rehdanz ),( Richard S. J. Tol ) 세종대학교 경제통합연구소 (구 세종대학교 국제경제연구소) 2008 Journal of Economic Integration Vol.23 No.3

We used the GTAP-W model - GTAP version 5 with water resources added - to estimate the impact of hypothetical Doha-like liberalization of agricultural trade on water use. Three conclusions emerge. First, the change in regional water use is less than 10 per cent relative to the baseline in 2010, even if agricultural tariffs are reduced by 75 per cent. Second, patterns are non-linear. Water use may go up for partial liberalization, and down for more complete liberalization. This is because different crops respond differently to tariff reductions, but also because trade and competition matter too. Third, trade liberalization tends to reduce water use in water scarce regions, and increase water use in water abundant regions, even though water markets do not exist in most countries.