Adjustment under different trade strateg 001
Department of Agricultural and Resource
Economics, UCB
UC Berkeley
Title:
Adjustment under different trade strategies: a mean-variance analysis with a CGE model of the
Yugoslav economy
Author:
Adelman, Irma, University of California, Berkeley and Giannini Foundation
Berck, Peter, University of California, Berkeley and Giannini Foundation
Labus, Miroljub, University of California, Berkeley
Vujovic, Dusan, University of California, Berkeley
Publication Date:
01-01-1990
Series:
Other Recent Work
Publication Info:
Other Recent Work, Department of Agricultural and Resource Economics, UCB, UC Berkeley
Permalink:
http://www.escholarship.org/uc/item/7bz20689
Keywords:
commerce, economics, equilibrium, sam
eScholarship provides open access, scholarly publishing
services to the University of California and delivers a dynamic
research platform to scholars worldwide.
!!...E}?ARTMENT OF AGRICULTURAL AND RESOURCE ｅ ｃ ｏ ｎ ｍ ｉ ｾ
. DIVISION OF AGRICULTURE AND NATURAL ｾＰｬｊｉｴｇｅｓ
.
i UNIVERSITY OF CALIFORNIA, £2.
2
37
13
0
0
1
0
0
0
Own Base
- 3% - 10%
J
80 Base
- 10%
4
a
0
a
7
0
9
100
0
0
0
66
100
100
32
0
0
94
100
58
1
ｾＹ
0
0
0
0
Export. Goods & ｓ･ｾｩ｣ｳＺ
Total
ot which Convertible
16
1
12
22
25
3
0
7
1
7
1
20
7
10
19
4
0
1
Industry
Of which Convertible
12
26
0
8
0
8
12
26
a
0
8
9
10
29
3
9
5
Services
Of which Convertible
29
6
a
a
4
33
4
6
0
96
88
27
5
0
Imports Goods & Services:
Total
Of which Convertible
35
9
a
9
0
35
0
10
98
0
100
28
0
11
0
Trade Balance Goods&Services
4
4
0
2
0
0
96
100
52
47
47
53
52
1
58
49
1
Terms of Trade Effect
a)
55
55
55
59
59
64
62
62
65
Import Controls Rents
a)
58
57
57
53
53
64
58
58
62
a) For definition see footnotes to table 3.
Source: Computed from one hundred replicates of random shocks to the Yugoslav CGE models for each of the
23
rents were, by defini tion, cen tered around a zero mean in all years. Since rens t
absorb the effects of import quantity quotas,
they were quite variable;
the
probability of all types of adverse outcomes was therefore large.
The Welfare Evaluation
In Table 5,
we summarize our calculations
equivalent variations.
for
expected utility and
Of course, the utility numbers in the table are only
ordinal; any monotone transformation of these numbers would be equally valid.
The table indicates that external adjustment was achieved at the cost of a steady
decline in hous'ehold utilities between 1987 and 1980 for a.ll household groups.
For example, the expected utility of rural households declined by 31% between
1987 and 1980; and that of urban households declined by 27% over that period.
The cost of adjustment was thus quite substantial.
But, except for the rural
households, welfare was diminishing at a declining rate.
The equivalent variations with respect to their own bases (next to last
row of table 5) represent the percent increase in base income that would be
required to compensa.t;e individuals for the variability in their uLilities induced
by the dis
Economics, UCB
UC Berkeley
Title:
Adjustment under different trade strategies: a mean-variance analysis with a CGE model of the
Yugoslav economy
Author:
Adelman, Irma, University of California, Berkeley and Giannini Foundation
Berck, Peter, University of California, Berkeley and Giannini Foundation
Labus, Miroljub, University of California, Berkeley
Vujovic, Dusan, University of California, Berkeley
Publication Date:
01-01-1990
Series:
Other Recent Work
Publication Info:
Other Recent Work, Department of Agricultural and Resource Economics, UCB, UC Berkeley
Permalink:
http://www.escholarship.org/uc/item/7bz20689
Keywords:
commerce, economics, equilibrium, sam
eScholarship provides open access, scholarly publishing
services to the University of California and delivers a dynamic
research platform to scholars worldwide.
!!...E}?ARTMENT OF AGRICULTURAL AND RESOURCE ｅ ｃ ｏ ｎ ｍ ｉ ｾ
. DIVISION OF AGRICULTURE AND NATURAL ｾＰｬｊｉｴｇｅｓ
.
i UNIVERSITY OF CALIFORNIA, £2.
2
37
13
0
0
1
0
0
0
Own Base
- 3% - 10%
J
80 Base
- 10%
4
a
0
a
7
0
9
100
0
0
0
66
100
100
32
0
0
94
100
58
1
ｾＹ
0
0
0
0
Export. Goods & ｓ･ｾｩ｣ｳＺ
Total
ot which Convertible
16
1
12
22
25
3
0
7
1
7
1
20
7
10
19
4
0
1
Industry
Of which Convertible
12
26
0
8
0
8
12
26
a
0
8
9
10
29
3
9
5
Services
Of which Convertible
29
6
a
a
4
33
4
6
0
96
88
27
5
0
Imports Goods & Services:
Total
Of which Convertible
35
9
a
9
0
35
0
10
98
0
100
28
0
11
0
Trade Balance Goods&Services
4
4
0
2
0
0
96
100
52
47
47
53
52
1
58
49
1
Terms of Trade Effect
a)
55
55
55
59
59
64
62
62
65
Import Controls Rents
a)
58
57
57
53
53
64
58
58
62
a) For definition see footnotes to table 3.
Source: Computed from one hundred replicates of random shocks to the Yugoslav CGE models for each of the
23
rents were, by defini tion, cen tered around a zero mean in all years. Since rens t
absorb the effects of import quantity quotas,
they were quite variable;
the
probability of all types of adverse outcomes was therefore large.
The Welfare Evaluation
In Table 5,
we summarize our calculations
equivalent variations.
for
expected utility and
Of course, the utility numbers in the table are only
ordinal; any monotone transformation of these numbers would be equally valid.
The table indicates that external adjustment was achieved at the cost of a steady
decline in hous'ehold utilities between 1987 and 1980 for a.ll household groups.
For example, the expected utility of rural households declined by 31% between
1987 and 1980; and that of urban households declined by 27% over that period.
The cost of adjustment was thus quite substantial.
But, except for the rural
households, welfare was diminishing at a declining rate.
The equivalent variations with respect to their own bases (next to last
row of table 5) represent the percent increase in base income that would be
required to compensa.t;e individuals for the variability in their uLilities induced
by the dis