Asia and Global Production Networks

Asia and Global Production Networks

Implications for Trade, Incomes and Economic Vulnerability

Edited by Benno Ferrarini and David Hummels

This timely book deploys new tools and measures to understand how global production networks change the nature of global economic interdependence, and how that in turn changes our understanding of which policies are appropriate in this new environment. Bringing to bear an array of the latest methods and data to study global value chains, this unique book assesses the evolution of global value chains at the firm level, and how this affects competitiveness in Asia.

Chapter 2: Developing a GTAP-based multi-region, input–output framework for supply chain analysis

Terrie L. Walmsley, Thomas Hertel and David Hummels

Subjects: asian studies, asian development, asian economics, development studies, asian development, development economics, economics and finance, asian economics, international economics

Extract

With the global economy increasingly inter-connected through international trade in intermediate inputs as well as consumer goods, the demand for analytical tools that trace out the implications of these linkages has grown significantly. Examples include studies of international supply chains and trade in value added (Koopman et al., forthcoming; and Johnson and Noguera, 2012), virtual water trade (Konar et al., 2013), life cycle assessment of environmental impacts (Hendrickson et al., 1998), and greenhouse gas (GHG) emissions associated with global trade flows (Peters et al., 2011). All of these studies require a global database that traces out these trade flows between sectors and between producers and consumers of final goods and services, that is, a multi-region, input–output (MRIO) database. In response to these demands, several projects have been formed with the goal of producing new MRIO databases, including EXIOBASE (Tukker et al., 2009), WIOD (Timmer, 2012), OECD-TiVA (OECD, 2012) and Eora (Lenzen et al., 2013 and Lenzen et al., 2012). An alternative source of global economic data suitable for MRIO-type analysis is the Global Trade Analysis Project (GTAP) database (Narayanan et al., 2012), first released in 1993, which has been updated and encompasses eight releases covering the period 1990 to 2007; a 2011 update is being prepared. The GTAP database is most commonly used as the foundation for global computable general equilibrium (CGE) models.

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