Gravity-Based Tools to Assess the Impact of Tariff Changes

An Application to Armenia

authored by: Arevik Gnutzmann-Mkrtchyan, Jules Hugot
Abstract: This paper uses two empirical tools to quantify the impact of tariff changes on bilateral trade and welfare. Both tools are rooted in structural gravity literature. The first tool estimates the impact of tariff changes on bilateral trade for 5,020 products in a partial equilibrium framework. The second tool quantifies the impact on bilateral aggregate trade in a general equilibrium setup, allowing estimates of trade diversion and welfare changes. These tools are used to estimate the impact of tariff changes on Armenia with regard to (i) its alignment with the external tariff of the Eurasian Economic Union; (ii) free trade agreements between the Eurasian Economic Union and other economies, including Iran and the People's Republic of China; and (iii) Armenia's loss of beneficiary status under the Generalised Scheme of Preferences of the European Union.
Organisation(s): Faculty of Economics and Management
External Organisation(s): Asian Development Bank Philippines
Type: Article
Journal: Asian Development Review
Volume: 41
Pages: 219-256
No. of pages: 38
ISSN: 0116-1105
Publication date: 01.09.2024
Publication status: Published
Peer reviewed: Yes
ASJC Scopus subject areas: Geography, Planning and Development, Development, Economics and Econometrics
Electronic version(s): https://doi.org/10.1142/S0116110524500057 (Access: Closed)

BibTeX

@article{0469bab3a167424da95fdbf81705a0b0,
title = "Gravity-Based Tools to Assess the Impact of Tariff Changes: An Application to Armenia",
abstract = "This paper uses two empirical tools to quantify the impact of tariff changes on bilateral trade and welfare. Both tools are rooted in structural gravity literature. The first tool estimates the impact of tariff changes on bilateral trade for 5,020 products in a partial equilibrium framework. The second tool quantifies the impact on bilateral aggregate trade in a general equilibrium setup, allowing estimates of trade diversion and welfare changes. These tools are used to estimate the impact of tariff changes on Armenia with regard to (i) its alignment with the external tariff of the Eurasian Economic Union; (ii) free trade agreements between the Eurasian Economic Union and other economies, including Iran and the People's Republic of China; and (iii) Armenia's loss of beneficiary status under the Generalised Scheme of Preferences of the European Union.",
keywords = "Armenia, Eurasian Economic Union, free trade agreements, generalised scheme of preferences, gravity",
author = "Arevik Gnutzmann-Mkrtchyan and Jules Hugot",
note = "Publisher Copyright: {\textcopyright} 2024 Asian Development Bank and Asian Development Bank Institute.",
year = "2024",
month = sep,
day = "1",
doi = "10.1142/S0116110524500057",
language = "English",
volume = "41",
pages = "219--256",
journal = "Asian Development Review",
issn = "0116-1105",
publisher = "World Scientific",
number = "2",
}