Le modèle scandinave et l’économie canadienne

In the Scandinavian model of wages and prices determination a fundamental distinction is drawn between sheltered and exposed industries. Exposed industries are exposed to strong competition from abroad, and sheltered industries are those whose products are sold at home under conditions that protect them from strong foreign competition. In the second section, our criteria to classify exposed and sheltered industries will be presented. In the third section, the construction and evolution of the main sectoral macro-variables will be discussed. The fourth section includes derivation of wages and prices equations for both industries and presents an econometric estimation. En vue de rendre compte des mécanismes de transmission de l’inflation au Canada, notre étude applique une distinction entre les industries abritées et les industries exposées. Ces dernières sont soumises à une forte concurrence de leurs compétiteurs étrangers, alors que les industries abritées en sont préservées. Les critères de classification des branches exposées et abritées sont présentés dans la deuxième section de l’article, tandis que dans la section 3, nous discutons du mode de construction et l’évolution des principales variables macro-sectorielles. La section finale traite des équations du modèle et présente les résultats des estimations économétriques.

La formation des prix et les industries canadiennes exposées et abritées

Following the bursts of inflation registered in the 1970s, many authors pointed to a generalization of the phenomenon of inflation and claimed that in a small economy highly integrated into international markets, the steady rise in general price levels might be attributable to foreign causes. In this context, the "Scandinavian School" gave renewed credibility to the division of the economy into two major categories: sectors exposed to strong international competition and those protected from such competition.

Regionalization and Labour Market Rigidities in Developing Countries: A CGE Analysis of UEMOA

In this study, we analyse the impact of the creation of a customs union among UEMOA (Western African Economic and Monetary Union)countries, with a special emphasis on the labour market structure. The implementation of the customs union reform will translate in most of these countries, into a greater openness, even with third party countries. This greater openness raises concerns in these countries as regards its potential impact on welfare, production and employment. In this study, in contrast to many other papers, we relax the assumption of a perfect functioning of the labour market. We consider the presence of a dualism in the labour market and the existence of a minimum wage for the formal workers. We use a multi-country and multi-sectoral computable general equilibrium model (CGE) to assess the impact of the reform. We find that the presence of a minimum nominal wage for the formal workers may significantly reduce the gains stemming from the customs union reform. Our simulation results indicate that the costs induced by this rigidity may exceed 45%, in some cases, in terms of the reduction in the welfare gains obtained without rigidity.Economic integration, Customs union, Labor market, Dualism, Wage rigidity

The poverty impacts of the Doha Round in Cameroon : the role of tax policy

The authors aim to assess the possible impacts of the Doha Round of negotiations on poverty in Cameroon. During the recent period of economic recovery, Cameroon enjoyed a sharp decline in poverty, with the headcount index falling from 53.3 percent of inhabitants in 1996 to 40.2 percent in 2001, mostly due to economic growth rather than redistribution. Will the current trade negotiations under the Doha Round reinforce or curb this trend? They apply a computable general equilibrium (CGE) microsimulation model that involves 10,992 households in order to address this question. The authors find the Doha Round to be poverty-reducing for Cameroon. For the whole country, the estimate of the net number of people who are lifted out of poverty is 22,000 following this scenario. Further investigations indicate that more ambitious world trade liberalization leads to greater poverty alleviation at the national level, while Cameroon's domestic trade liberalization has adverse poverty and inequality impacts-despite giving rise to higher aggregate welfare. Under the Doha scenario, the cuts in Cameroon's tariffs are very small (the average tariff rate moves from 11.79 percent in the base run to merely 11.66 percent) so that world trade liberalization effects on prices more than offset the adverse own liberalization effects in this scenario. If the rest of the world and Cameroon full trade liberalizations are combined, the adverse impacts of own liberalization outweigh the favorable outcomes of the world trade liberalization. The results suggest furthermore that the choice of tax replacement instrument can have an important bias in poverty impacts: poverty gets worse in the country case study when using an imperfect value-added tax instead of a neutral replacement tax to compensate lost tariff revenue, and gets even worse when using a consumption tax. Key reasons here are the supplementary distortions which are nil in case of a neutral tax and greatest in the case of a consumption tax. In addition, accompanying measures should be considered to avoid poverty increases in the framework of Economic Partnership Agreements currently in negotiation between African, Caribbean, and Pacific (ACP) countries and the European Union, which propose a drastic dismantlement of ACP tariffs over the next few years.Rural Poverty Reduction,Economic Theory&Research,Free Trade,Poverty Assessment,Achieving Shared Growth

FUTURE TRADE RESEARCH AREAS THAT MATTER TO DEVELOPING COUNTRY POLICYMAKERS

Income, welfare, poverty, consumer price, compensation

Implications of WTO agreements and unilateral trade policy reforms for poverty in Bangladesh : short versus long-run impacts

The authors examine the effects of WTO agreements and domestic trade policy reforms on production, welfare, and poverty in Bangladesh. They use a sequential dynamic computable general equilibrium (CGE) model, which takes into account accumulation effects, allowing for long-run analysis. The study is based on the 2000 Social Accounting Matrix (SAM) of Bangladesh including 15 production sectors, four factors of production (skilled and unskilled labor, agricultural and nonagricultural capital), and nine household groups (five in rural areas and four in urban areas). To examine the link between the macroeconomic effects and microeconomic effects in terms of poverty, the authors use the representative household approach with actual intra-group income distributions. The study presents five simulations for which the major findings are: (1) The Doha scenario has negative implications for the overall macroeconomy, household welfare, and poverty in Bangladesh. Terms of trade deteriorate and consumer prices, particularly food prices, increase more than nominal incomes, especially among poor households. (2) Free world trade has similar, but larger, impacts. (3) Domestic trade liberalization induces an expansion of agricultural and light manufacturing sectors, favorable changes in the domestic terms of trade. Although the short-run welfare and poverty impacts are negative, these turn positive in the long run when capital has adjusted through new investments. Rising unskilled wage rates make the poorest households the biggest winners in terms of welfare and poverty reduction. (4) Domestic liberalization effects far outweigh those of free world trade when these scenarios are combined. (5) Remittances constitute a powerful poverty-reducing tool given their greater importance in the income of the poor.Economic Theory&Research,Rural Poverty Reduction,Free Trade,Markets and Market Access

Quand l'eau n'est plus un don du ciel: un MEGC appliqué au Maroc

L'eau est devenue une ressource naturelle précieuse dans la plupart des régions du monde. Avec une croissance phénoménale de la demande, les gouvernements des pays au prise avec cette rareté nouvelle ont tenté d'y faire face en augmentant la capacité de stockage de l'or blanc. Depuis le début de cette décennie, ces gouvernements semblent changer de cap en s'orientant vers une meilleure gestion de la demande afin de rationaliser l'utilisation de la ressource. Cependant, une augmentation drastique du prix chargé aux agriculteurs pourrait avoir des conséquences néfastes sur les secteurs agricoles et se répercuter sur le niveau de vie des ménages agricoles qui représentent une large part de la population active. Nous pensons que toute nouvelle grille tarifaire devrait être étudiée en prenant conscience des répercussions directes et indirectes qu'elle pourrait avoir sur l'ensemble de l'économie et sur le secteur agricole en particulier. Afin de capter ces effets d'interdépendance, nous utilisons un modèle d'équilibre général calculable (MEGC). Avec l'aide de cet outil, nous étudions également l'impact d'une sécheresse sur l'ensemble de l'économie dans ce cahier de recherche. Water has become a precious resource in most regions of the world. The unrelentless increase in it's demand over the years forced governments to significantly increase their country's resource storage capabalities. Public investments were reallocated into the construction of infrastructures such as dams and wells. However, the governments occupied by the scarcity crisis are now reassessing their water management policies due to the mounting costs of these infrastructures. This change of action emphasizes on a better management of the demand for water. These water management reforms often implies an increase in the prices of agricultural water. However, a drastic increase in the agricultural water prices could have negative impacts on the agricultural sector and consequently on the rural households, which represents an important part of the labor force in developing countries. Hence, the pricing instrument shoud be applied cautiously. The direct and indirect effects that this instrument could induce on the economy should be considered with great importance. To capture these general equilibrium effects generated by new water tarifs, we use a computable general equilibrium (CGE) model. The effect of a drought on the economy is also analyze through a CGE model in this working paper.