augmenting the gtap database with data on inter-regional.pdf

Augmenting the GTAP Database with Data on Inter-Regional Transactions Paper prepared for the 7th Annual Conference on Global Economic Analysis, Trade, Poverty and the Environment, World Bank, Washington, June 17-19, 2004 Augmenting the GTAP Database with Data on Inter-Regional Transactions Scott McDonald and Yontem Sonmez Abstract This paper reports the results of an exercise to augment the GTAP database with information from the income and current transfers components of the current account of the balance of payments. The exercise demonstrates that the process of augmenting the GTAP database is relatively straightforward. A simple simulation exercise using the augmented and non-augmented versions of the database demonstrates that the results from a trade liberalisation scenario are sufficiently large to provide a justification for the augmentation of the GTAP database over and above the case that could be argued based on national accounting conventions. Keywords: Social Accounting Matrix, Trade Analysis, Computable General Equilibrium. Correspondence Address: Department of Economics, The University of Sheffield, 9 Mappin Street, Sheffield, S7 1HR, UK. tel: +44 114 2223407, email: s.mcdonald@sheffield.ac.uk or y.sonmez@sheffield.ac.uk 1 Augmenting the GTAP Database with Data on Inter-Regional Transactions 1. Introduction The external accounts in the GTAP database record external transactions for goods and services – the ‘External Accou