Analyzing Agricultural Trade Liberalization with Single-Country Computable General Equilibrium Models

paper surveys recent work with single-country computable general equilibrium (CGE) models to analyze issues of agricultural trade liberalization.This work has drawn heavily on earlier work with CGE models of developing countries designed to analyze issues of "structural adjustment" to external shocks.The paper argues that most trade-focused, single-country CGE models are based on the Salter-Swan "Australian" trade model, which incorporates non-traded goods.A two-sector, three-commodity analytic model is presented which incorporates imperfect substitution and transformability between goods produced for the domestic and world markets.This model represents an extension of the Salter-Swan model and provides the anlytic core for most =de-focused CGE models.The empirical work with these models has followed two strands.The first has sought to improve the model specification with regard to agriculture, but stay close to standard neoclassical theory.The second strand has sought to extend the models to include phenomena such as rent seeking, imperfect competition, scale economies, and externalities.The survey discusses examples of work in both strands.2•