General equilibrium models in international trade

Abstract

Purpose. The purpose of the article is to disclose the features of mathematical modeling application in the analysis of international flows of goods and services, and to justify the necessity of transition to the qualitatively new methodology of evaluation of trade and economic policy measures at the different levels in Ukraine.

Research methodology. The theoretical frameworkof the article consists of basic research in the field of applied economics and mathematical modeling, general equilibrium theory in economics.

The methodological base of paper is formed by general (methods of analysis and synthesis, comparative analysis, methods of classification and systematization) and special methods of economic analysis (quantitative representation of economic relations, the methods of calculating the dynamics of general equilibrium in the economy). Materials of central executive authorities of Ukraine and the results of researches of foreign and domestic scientists constitute the information base of paper.

Results. The essence of applied general equilibrium models is revealed. Characteristic features of methods aimed to obtain results through the use of applied general equilibrium models, including the Johansen’s method, Euler’s method, and the Gragg’smethod are analyzed. Input-output model is characterized. The necessity of using "input-output" tables both at the macroeconomic level and at the level of industrial clusters and individual enterprises is grounded. The essence of the GTAP, its role in evaluating the consequences of modern foreign trade policy is identified.

Scientific novelty lies in deepening of the theoretical foundations in research and application of general equilibrium models and in developing recommendations for enhancing the use "input-output" tables in domestic practice to assess the impact of trade and economic activities at the macro, meso, and micro level.

The practical significance of the results is that the formulated provisions and conclusions can be used to justify the intensification of economic analysis models development. Their implementation will improve the efficiency of foreign trade policy of Ukraine.