Analysing the Effects of a Pigs Production Quota within a Dynamic CGE Framework

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Philip D Adams, Lill Thanning Hansen, Lars Bo Jacobsen

In this paper we address the issue of timing and announcement within a dynamic applied general equilibrium model of the Danish economy. Specifically we analyse the introduction of a quota on the production of pigs. Two scenarios are analysed, namely the introduction of a once-off quota without any previous announcement and secondly, an announced gradually phased in production quota. Our findings suggest that the adjustment path is smoother when the policy is announced compared with the one being implemented without warning. This is the result of investors anticipating correctly future adjustments in prices and rental rates when making their investment decisions. Hence, the capital stock starts to adjust from the start of the simulation. When the quota is implemented without warning investors adjusts fully when the quota is implemented. In the long run, however, we find that the alternative timing strategies lead to similar results.
Original languageEnglish
Title of host publicationGTAP 2001 Conference Papers
Number of pages20
PublisherCenter for Global Trade Analysis, Purdue University
Publication date2001
Publication statusPublished - 2001
EventAnnual Conference on Global Economic Analysis, Purdue University, USA - West Lafayette, IN, United States
Duration: 27 Jun 200129 Jun 2001
Conference number: 4

Conference

ConferenceAnnual Conference on Global Economic Analysis, Purdue University, USA
Nummer4
LandUnited States
ByWest Lafayette, IN
Periode27/06/200129/06/2001

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