Capturing NAFTA's Impact With Applied General Equilibrium Models

 Public
Creator Series Issue number
  • Vol. 18, No. 2
Date created
  • 1994 Spring
Abstract

  • We examine the results of four static applied general equilibrium (AGE) modeling teams' analyses of the effects of NAFTA. What they show is that Mexico's economy, because it's the smallest, will see the biggest NAFTA-produced increase in economic welfare: from 2 to 5 percent of GDP. The U.S. welfare increase will be small, around 0.1 percent of GDP; Canada will notice no welfare increase due to NAFTA. We then discuss two examples of dynamic phenomena—labor force adjustment and capital flows—which are likely to influence NAFTA's welfare impact, but that aren't easy to incorporate into static AGE models. Early results indicate that this is an important direction for future study.

Related information

  • Published In: Modeling North America's Economic Integration (1995, pp. 33-57)

Corporate Author
  • Federal Reserve Bank of Minneapolis. Research Department
Publisher
  • Federal Reserve Bank of Minneapolis
Resource type DOI
In Collection:

Downloadable Content

Download PDF
Cite EndNote

Zipped Files

Download a zip file that contains all the files in this work.

Thumbnail Title Date Uploaded Visibility Actions
file details qr1822.pdf 2019-12-11 Public Download