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Computable General Equilibrium (CGE) Modeling Services on Trade and Integration

Assessing the aggregate and distributive effects of trade reform to enhance the developmental benefits of economic integration in Latin America

Since the early nineties, countries in Latin America and the Caribbean have actively engaged in unilateral, bilateral, and multilateral trade initiatives. The simultaneity and increasing complexity of the regional trade agenda have triggered a growing demand for rigorous and comprehensive evaluations of the potential aggregate and distributive effects of trade reform.

In-deep general-equilibrium-focused assessments of overall trade liberalization impacts are increasingly being used by governments across the region to adopt more effective and realistic trade negotiation strategies and to implement Trade Adjustment Programs (TAP) to enhance the opportunities and minimize the potential costs of trade openness.

In view of this dynamism, the Integration and Trade Sector (INT) built a trade-focused multi-region Computable General Equilibrium (CGE) model with specific regional focus to meet the growing demand for trade policy evaluations from member countries. Relative to other CGE models and databases available, the main advantages of the INT/IDB model relies on (i) its expanded regional coverage for the Latin American region, as it includes more countries (sixteen) than any other available model, and (ii) the highest-quality and most updated data on trade, tariffs, and the structure of the economies in the region (national social accounting matrices).

After ten years of continuous work in this area, INT/IDB has become a leading institution in CGE modeling in Latin America, has expanded, in scope and number of clients, CGE-related services to governments across the region, and has consolidated a regional network of researchers through conferences, outreach publications, and workshops.

CGE-related services and activities carried out by INT/IDB include:

  • Advisory Services to governments including technical assistance in CGE quantitative analysis, policy recommendations studies, and policy briefs assessing global and regional integration initiatives, such as trade agreements, and migration.
  • Capacity Building activities including institution-customized training workshops in CGE modeling to government personnel.
  • CGE Regional Research Network development, consisting in an annual research and policy-oriented seminar to promote and disseminate CGE-related material among modelers and policy makers across the region.

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