• Korea Trade Review
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• v.47 no.4
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• pp.125-135
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• 2022

This study is to analyze the economic effects of tariff reduction using computable general equilibrium(CGE) model. We set up the social accounting matrix for five-base equilibrium year. Our main findings are as follows. First, the impact of tariff reduction on GDP was different from time to time. It meas that the differentiated economics structure was affected by tariff reduction. As our economic grew up, the impact of tariff reduction was measured much higher. Second, until 1995 the impact of tariff reduction on total export and import was increased, then while 1995 the increase was dropped. This is because we reduced the tariff by the WTO negotiations. Third, the tariff reduction affected the price of imported goods, so it contributed to substitute effects between domestic and imported goods. According to these results, we found out the importance of the linkage between the tariff reduction and economic structure.

• Korea Trade Review
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• v.43 no.5
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• pp.47-66
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• 2018

This study analyzes the potential economic effects of a trade war between the U.S. and China. The CGE model is used to estimate the macroeconomic variables of each country and the change in imports/exports by industry by considering three different scenarios: (i) the US imposes a 25% of tariff on China; (ii) the US and China impose a 25% tariff bilaterally; (iii) the United States expands protection in vehicles and metals to Korea, Japan, and the EU. According to the results of the study, when the US and China initiate a trade war, GDP and welfare of both countries decline. China's decline in GDP and welfare are larger than those of the United States, which implies a trade war is more favorable to the U.S. than to China. In the long run, China's GDP and welfare decline widens further. While the trade volumes of the US and China are greatly reduced, the trade volumes of other countries does not significantly fluctuate. Finally, if the US extends protection policy to Korea, Japan and the EU, it creates undesirable effects on the US. In particular, damage to the US jeopardizes its advantageous position in a trade war with China. In order to emphasize the unfairness of protectionist policy and the damage to Korean industry, Korea needs to establish a strategy to counter US protectionist policy.

• Environmental and Resource Economics Review
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• v.28 no.2
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• pp.231-276
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• 2019

This paper analyzed the impact of the penetration of EV(electric vehicle) and FCEV(fuel cell electric vehicle) into the automobile industry, using a static CGE approach. There are contrasting view on the economic impact of EV/FCEV penetration: negative economic impact due to shrunken intermediate inputs versus positive impact because of input saving technical progress. Regarding environment, there is no clear consensus whether EV or FCEV will contribute to the reduction of $CO_2$ emissions in Korea. This study attempts to provide an answer to these questions. By giving shocks to the input coefficients of automobile industries and automobile using sectors, as well as to the final demands for energies. we integrated the Bass diffusion model into the CGE framework, The result suggests that the EV penetration has adverse impact on the $CO_2$ emission while the FCEV penetration has positive impact. On the other hand, both EV and FCEV have positive impacts on GDP. When considering automobile manufacturing sectors only, adverse impacts on $CO_2$ are demonstrated both for EV and FCEV. However, since the size of $CO_2$ increase is small, these results does not alter the overall effects.

• Environmental and Resource Economics Review
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• v.20 no.2
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• pp.199-228
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• 2011

In this study, the effect on the economy-energy-environment gap among regions of reducing GHGs is analyzed under various scenarios, using a multiregional dynamic CGE model. Regions in Korea are classified as six metropolitan areas. Scenarios are set in three cases such as self-regulatory measures, carbon tax and emissions trading scheme. The reduction target under each scenario is again classified according to volume basis and intensity basis. In results, self-regulation is shown to deepen the economic divide mostly, followed by a carbon tax, emissions trading scheme in order. This result could be interpreted such that a system based on market incentives gives less effect on the gap among regions. However, market incentives based system is expected to take time to build. Thus in implementing policies to increase short-term effects of the reduction targets, complementary policies are needed to reduce the regional devide.

• Korean Journal of Agricultural Science
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• v.49 no.1
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• pp.31-43
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• 2022

The global trade environment is rapidly changing. The spread of COVID-19 promotes digitalization, and online transactions are becoming the new normal. Currently, Korea is actively introducing information and communication technology (ICT) that uses the internet of things (IoT) in relation to agriculture. However, few studies have analyzed the impact of digitalization on trade in the agricultural sector. Thus, the purpose of this study is to examine how the introduction of digital technology can affect the economy and trade of Korea. In this study, we estimate the impact of introducing digital technologies using the computable general equilibrium (CGE) model. The results of this analysis indicate that the GDP could increase by 3.82% to 10.53%. Also, agricultural production and trade according to the model will significantly increase to 8.67% and 5.72%, respectively, through a productivity increase from Blockchain, IoT, and artificial intelligence (AI) technologies, despite logistics inefficiencies. Although the effects of digitalization could be significant, farmers are still struggling to introduce digital technologies, stemming from the fact that government support systems are concentrated in only a few sub-sectors. In this regard, support in this area must be expanded and diversified according to the current environment of agriculture in Korea.

• Environmental and Resource Economics Review
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• v.18 no.3
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• pp.457-493
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• 2009

This paper evaluates major issues of Post-Kyoto negotiation of UNFCCC and conducted economic analysis by utilizing a computable general equilibrium(CGE) model(GTEM-KOR). It points three major agendas of the negotiation to be settled : (1) return of the US to GHG abatement commitment; (2) participation of developing countries in GHG abatement commitment; and (3) development of a comprehensive approach for post-Kyoto period. It also emphasizes the differentiation of developing countries and the type and strength of commitment as the negotiation issues for settlement of those agendas. The analysis by using GTEM-KOR shows the differentiation between developing countries based on per capita GDP and/or per capita emissions is inefficient in terms of global GHG emission reduction and it will exposure Korea to strong pressure of commitment relative to other developing countries. It also shows that the participation of developing countries such as China and India is one of the most important factors for the environmental effectiveness of the Post-Kyoto regime. It emphasizes that the relative strength of commitment and the scope of country participation rather than type of commitment are major components determining the economic and environmental effectiveness of the Post-Kyoto regime.

• Environmental and Resource Economics Review
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• v.18 no.1
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• pp.23-51
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• 2009

This research alms at quantifying economic impacts of free trading policy on environment-friendly fuel industry applying a static general equilibrium (CGE) model for Korea. Theoretically, 'polluters haven' hypothesis had been debated as major issue on the environmental effects of trade liberalization during 1970s and 1980s but recent literature emphasizes that production, scale, structural, and regulatory effects may derive rapid diffusion of environment friendly technologies. In this study, trade liberalization policy affects output of agricultural sectors negatively while that of biodiesel as environment-friendly technology positively. The rise m the output of biodiesel is derived from the reduction in import prices of agricultural products due to the abolishment of tariff. The policy implication from the analysis is that feedstock for producing biodiesel should be exploited in the foreign countries where productivity of agriculture is quite predominant compared to Korean agriculture.

• Journal of Environmental Policy
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• v.9 no.3
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• pp.115-142
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• 2010

The voluntary mid-term greenhouse gas(GHG) emission reduction targets for 2020 among major developed and developing countries were evaluated by using the global computable general equilibrium(CGE) model. The GHG emissions of developed countries were estimated to be reduced by 14.0% from 1990 level, which implies that the GHG reduction targets of developed countries should be strengthened to reach agreement in future post-Kyoto negotiations. The voluntary participation of developing countries for GHG emissions reduction contributed to global GHG emissions reduction by 15.9% from 1990 levels, which were led by the participation of China and India. These outcomes imply that the reinforcement of GHG emission reduction targets in developed countries and the wider participation of developing countries will be necessary for the environmental effectiveness of the post-Kyoto regime. Emissions reduction based on voluntary targets will decrease the global real GDP by 1.18%.

• KDI Journal of Economic Policy
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• v.24 no.2
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• pp.53-82
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• 2002

Earlier papers, regarding this topic, have shown that the optimal environmental tax rate under the second best situation typically smaller than that under the first best world, the well known Pigouvian tax. This paper casts a doubt on the generality of this result, since the conclusion was derived from the models which employed rather strict assumptions on the utility function, which is homothetic and separable. This paper, with simple-static CGE model, shows that the result of earlier studies is sensitive to the assumption on the utility function. According to the simulation results, as previous studies pointed out, if the utility function is assumed to be homothetic, the optimal environmental tax rate is smaller than the Pigouvian tax. In contrast, if certain type of non-homotheticity is allowed, the optimal environmental tax rate could be greater than the Pigouvian tax. The results of this simulation also imply that the enlargement of environmental tax base could enhance the efficiency of overall tax system. Hence, there will be a less burden to share for the tax authority from the policy change.

• Environmental and Resource Economics Review
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• v.11 no.2
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• pp.291-319
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• 2002

This Paper investigates imperfect competition and economy of scale on Korean energy markets based on computable general equilibrium model. Some industries like energy sector have exhibited that their economies have strong economies of scale and imperfect competition. Thus these industrial organization facts should be incorporated into CGE model. In our model, non-competitive markets are adopted and compare these results with convention perfect competition model.