Abstract
Spatial computable general equilibrium (SCGE) theory has been applied to an international trade model to evaluate tariff and fiscal policies of a country. Those models can not be applied for the evaluation of transport policies such as port development and tax/subsidy policy against transportation sectors, since they do not deal with ocean freight and ocean carriers explicitly in the model. Ocean freight often varies with the changes of competitive conditions and/or demand/ supply balances in the short run, while it should reflect the actual expenditure of the carriers in the long run. The model proposed here considers the profit maximization behaviour of ocean carriers, and deals with ocean freight explicitly. The model is applied to four major economic regions; Japan, USA, EU and Asia. A multi-level function composed of the Cobb-Douglas function is adopted to produce reliable parameters of the production function for many industries.
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