Trade Elasticities Reshape Global Economy, Alter Welfare and Wages
CGE models are used to predict how trade policies affect economies. Trade elasticities, which show how much trade changes with price, play a big role in these predictions. Researchers updated these elasticities in a CGE model to see how they affect trade policy outcomes. They found that trade elasticities have a significant impact on trade patterns, welfare, and factor returns in the model.
