Abstract
Computable General Equilibrium (CGE) models are mostly used for agricultural market analysis globally. This paper constructs a Computable General Equilibrium model using Global Trade Analysis Project (GTAP) model followed by the GTAP 9A database. The primary aim of this paper is to analyze the potential impact of tariff increase on Agricultural crop sectors (Rice and Wheat) in Bangladesh and then describes the construction of the database. It also attempts to detect the trend of the tariff change impact on rice and wheat production in Bangladesh and other South Asian countries. Using database reference year 2011, this paper builds a computable general equilibrium model to measure the Tariff impact in Bangladesh. Result of the model suggests that if an import tariff is imposed, it will affect domestic-foreign relative price between Bangladesh and other south Asian countries. Bilateral trade between Bangladesh and South Asia country will decline sharply. Finally, this paper explained the policy scenario, data sources, and processing methods in details.
Highlights
Bangladesh is located in South Asia and a low-lying, riverine country with a largely marshy jungle coastline of 710 km on the northern coast, total area 147,570 square kilometers
On main Global Trade Analysis Project (GTAP) model shocks section, at first scenario we increased rice tariff 20 percent and in second scenario we increased 10 percent tariff on Wheat to know the economic output between Bangladesh and other South Asia Country
Our simulation results suggest a clear view for Bangladesh among all trading partners in south Asian country, at least in terms of GDP percentage changes
Summary
Bangladesh is located in South Asia and a low-lying, riverine country with a largely marshy jungle coastline of 710 km on the northern coast, total area 147,570 square kilometers. Wheat is basically a winter crop in Bangladesh and is temperature sensitive and the second most important grain crop after rice It occupies around 4% of the total cropped area and 11% of the area cropped in rabi (winter crops starting from November to February), and contributes 7% to the total output of food cereals (Anonymous, 2008). Computable general equilibrium (CGE) model is mostly used for quantitative analysis of economics and public finance policies. It can be used for simulation forecasting in national economy, trade, environment, fiscal taxation, public policy, Quantitative tools, etc. CGE modeling specifies economic relationship in mathematical terms that allows predict the changes in price, output and change in economic policies. This study used GTAP as the solution software and analyzes the economic impact, and makes simulation for the changes in economic indicators of Bangladesh and other South Asian countries
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