This paper presents a computable general equilibrium (CGE) model that assesses the impacts of the Covid‐19 pandemic on different economic sectors in Cameroon. A special feature of the CGE model used in this study is that it accounts for the importance of the informal sector in Cameroon. Indeed, more than 80% of the employed work in the informal sector, which is characterized by the precariousness and instability of income and employment over time and space. Simulation results suggest that economic sectors such as construction, education, hotels and restaurants and commerce should receive special attention, as they have experienced the most severe employments losses. This calls for a differentiated support from the government to protect employment in these industries.
In their seminal paper, Kennan and Riezman (1988) show that a "sufficiently" big country is better off under a tariff war compared to free trade. This prediction derived in a setting where market power stems from differences in factor endowments, is somehow puzzling, as the majority of free trade agreements notified to the GATT/WTO are initiated by large rather than small economies. To resolve this puzzle, I use a modified version of the Kennan and Riezman (1988) model to show that the outcomes of a tariff war depend not only on countries' endowment sizes, but also on consumption requirements. In particular, free trade benefits two asymmetric countries if the subsistence level of consumption in the large country is sufficiently higher than in the small country. In addition, free trade between symmetric countries may harm the country with a lower subsistence level of consumption. The theoretical framework presented in this paper supports the idea that even small countries enjoy some market power and thus helps understand why large economies seek free trade in natural resources with smaller commercial partners. P A C S F15, F35
The growing participation of developing and newly industrialized countries to international trade agreements is probably one of the most important developments of the last two decades. In fact, prior to the inception of the World Trade Organization in 1995, most commercial treaties were concluded between advanced industrialized countries, whereas today, they involve countries at different stage of economic development. Yet, trade agreements models commonly build upon the assumption that countries are symmetric. In particular, Bagwell and Staiger (1999, 2001, 2016) show that a reciprocal tariff cut between two symmetric countries is efficient and delivers mutual gains, as it increases trade
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.