The effects on bilateral trade and production volume of the peso devaluation and safeguard measures imposed by the Ecuadorian government are analyzed by means of a computable general equilibrium model. Given the model is of the "real economy" type, an approximation is used to estimate the effects of the peso devaluation. Results indicate that the peso devaluation may have an important impact on trade flows and that the safeguard measures, as designed, can only partly compensate it. Moreover, the safeguards have uneven effects among sectors and generate further deterioration in Ecuadorian exports to Colombia. Effects on production tend to be ambiguous for Colombia and negative for Ecuador, even when devaluation is relatively modest.
|Original language||English (US)|
|Number of pages||40|
|Journal||Revista de Economia del Rosario|
|State||Published - Dec 1 2009|
All Science Journal Classification (ASJC) codes
- Economics, Econometrics and Finance(all)