A plea for greater attention on the data in policy analysis
Author
Mercenier, J.
Yeldan, E.
Date
1999Source Title
Journal of Policy Modeling
Print ISSN
0161-8938
Electronic ISSN
1873-8060
Publisher
Elsevier Inc.
Volume
21
Issue
7
Pages
851 - 873
Language
English
Type
ArticleItem Usage Stats
128
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Abstract
The technical difficulties associated with building and solving applied general equilibrium (GE) models seem to have distracted our attention from the data. In this article, we forcefully stress that whatever the sophistication of the GE analysis, it is only worth the quality of the supporting data it utilizes. We first highlight an example of a flagrant flaw in officially published input-output data (factor-income shares) by an LDC (Turkey), which many researchers use without question. We then make use of an applied GE model to evaluate the dynamic gains for Turkey from currently debated trade policy options and compare the predictions using conservatively adjusted, rather than official, data on factor shares. We show that the predicted welfare gains are not only of a different order of magnitude, but in some cases, of a different sign; hence, suggesting contradictory policy recommendations.