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AppendixA. Behavioural Elasticity Parameters Tables A.1 and A.2 report the trade elasticities used in the main scenarios. The elasticities of substitution between imports by origin in Table A.2 are aggregated from the GTAP behavioural parameter database (Dimaran, McDougall and Hertel, 2006) after re-scaling by a factor 0.5 to reflect the short-run nature of the present analysis. The elasticities in this database are based on an econometric study by Hertel, Hummels, Ivanic and Keeney (2007) and distinguish 57 commodity groups. In the same database, the Armington elasticities of substitution between domestic commodities and aggregate imports are determined by the so-called ―rule of two‖, i.e. the Armington elasticities are assumed to be half as large as the elasticities of substitution between imports by origin. Some empirical support for this ad-hoc rule is provided by Liu, Arndt and Hertel (2004). The elasticities for the 57 GTAP sectors are aggregated to the 5 sectors of the present model using each destination region‘s sub-sectoral benchmark gross absorption shares and sub-sectoral import shares as weights. The sectoral factor substitution elasticities reported in Table 3 are likewise re-scaled aggregations of the corresponding GTAP database parameters using region-specific sectoral value added shares. Section 6 reports sensitivity analyses for alternative elasticity configurations.
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