Appendix Border Price and Export Demand Shocks in Developing Countries from Rest-of-the-World Trade Liberalization: The Linkage Model Dominique van der Mensbrugghe, Ernesto Valenzuela, and Kym Anderson
A global study by Anderson, Valenzuela, and van der Mensbrugghe—chapter 2 in this volume—uses the World Bank’s global Linkage model to examine the economic impacts of agricultural and trade policies on various countries, regions, and the world as a whole as of 2004. It does this by applying shocks to the global Linkage model through the removal of all agricultural price-distorting domestic and border policies both with and without the removal of the price-distorting trade policies affecting all other goods. (The application of the two sets of shocks helps us identify the relative contribution to various indicators that is supplied by agricultural policies and by trade policies directed at other merchandise.) The sets of shocks are also used in another global study in this volume— chapter 3 by Bussolo, De Hoyos, and Medvedev—to examine, in this case, the implications of price-distorting policies for inequality and poverty in more than 100 countries (by applying the Global Income Distribution Dynamics microsimulation tool, the GIDD Database, of the authors). The Linkage model is also used by the authors of the 10 national case studies reported in this volume to provide exogenous shocks to the national economywide models of these authors on the developing countries in the studies.1 The effects of the shocks on the national economies are then compared with the effects 457