Macroeconomic impacts of customs tariffs on Armington's composite and transfer exports/domestic goods in Algeria: A CGEM approach
Keywords:
Customs Tariffs Computable General Equilibrium (CGE) Model, Armington Model, Trade Policy, Economic DiversificationAbstract
This paper focuses on the macroeconomic consequences of customs tariffs in Algeria presented through a CGE model. Focusing on the Armington approach, which allows for product differentiation according to the country of origin, the research considers means of differences in composite factor prices, supply prices, and price of Armington's composite good over five sectors: agriculture, industry, hydrocarbons, services, and building/public works. Results indicate that the impact of import tariffs is generally detrimental to domestic prices, domestic production, and domestic competitiveness in all sectors, hydrocarbons included, which recorded the worst plunges. The results point to the conspicuous need for trade policy reforms, economic diversification, and domestic competitiveness enhancements in order to avert negative impacts and help promote sustained growth. This research calls attention to the significance of CGE models in the policy-making processes, with a strong focus on Algeria’s economic problems.
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Copyright (c) 2024 Walid Laib, Khadidja Bouaita

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