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A Comparison Study on ASEAN-Japan and ASEAN-Korea Free Trade Agreements using CGE Model

Author

Listed:
  • Tsung-Chen Lee (Correspondnce author)

    (Faculty of Department of Economics, National Taipei University 151 University Road, Sanshia District, New Taipei City 237, TAIWAN)

  • Shiao-Wei Lo

    (Department of Economics, National Taipei University, 151 University Road, Sanshia District, New Taipei City 237, TAIWAN)

  • Wen-Cheng Lin

    (Department of Economics, National Taipei University 151 University Road, Sanshia District, New Taipei City 237, TAIWAN)

Abstract
This study compares the economy-wide impacts of the ASEAN-Japan and ASEANKorea free trade agreements (FTAs) by conducting a computable general equilibrium (CGE) analysis with highlighting the role of labor market specification. The ASEAN, Japan and Korea are shown to have more significant real GDP growth under the simulation scenarios of unemployment and perfect labor mobility. The associated benefits of FTAs, in terms of economic growth and the reduction in unemployment, are more significant in Japan and Korea than in the ASEAN. Finally, the ASEAN would experience higher increase in the employment of unskilled labor in the FTA with Korea, while Korea would see a higher increase in the employment of skilled labor.

Suggested Citation

  • Tsung-Chen Lee (Correspondnce author) & Shiao-Wei Lo & Wen-Cheng Lin, 2017. "A Comparison Study on ASEAN-Japan and ASEAN-Korea Free Trade Agreements using CGE Model," Review of Economics & Finance, Better Advances Press, Canada, vol. 8, pages 79-95, May.
    • Handle: RePEc:bap:journl:170206
    Note: This research is funded by Ministry of Science and Technology of Taiwan, Project No. NSC 102-2410-H-305-055.
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    References listed on IDEAS

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    Cited by:

    1. Jeff Ferry & Badri Narayanan Gopalakrishnan & Amanda Mayoral, 2022. "The impact of a U.S.–U.K. free trade agreement on workers: a CGE model with worker displacement," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 57(3), pages 121-138, July.

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    More about this item

    Keywords

    Trade liberalization; Labor market; Computable general equilibrium; ASEAN; Global trade analysis project;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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