S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics Seoul Journal of Economics vol.23 no.1/4 (2010)
Tariff Reduction in a Small Open Economy
- Vaqar, Ahmed; Cathal, O’Donoghue
- Issue Date
- Seoul Journal of Economics, Vol.23 No.4, pp. 461-489
- During the late 1990s, Pakistan managed to significantly liberalize
its external sector, and by 2002, the average tariff rate was under
17 percent which was well below the average in comparative countries.
Using a social accounting matrix (SAM) for 2002, we develop
a computable general equilibrium (CGE) model to evaluate the impact
of tariff reduction in Pakistan. Our analysis goes beyond the
usual trade-focused general equilibrium studies for Pakistan, as we
also conduct a detailed sensitivity analysis to check the robustness
of welfare-related results. Our findings suggest an overall positive
impact of slashing tariff rates on macroeconomic, and welfare indicators.