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NERAM: A Nominal and Effective Rates of Assistance Model for the SALTER World Trade Models

Salter Working Paper Number 5

NERAM - A Nominal and Effective Rates of Assistance Model for the SALTER World Trade Models by Stephen Brown is Working Paper number 5 in the development of The SALTER Model of the World Economy.

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1   Introduction

2   Assistance measurement
2.1   Concepts
2.2   Measures
2.2.1   Nominal rates of assistance
2.2.2   Effective rates of assistance
2.2.3   Net subsidy and consumer tax equivalent
2.3   Assumptions
2.3.1   Basic assumptions
2.3.2   Value added and the treatment of capital
2.3.3   Traded and non-traded goods
2.4   Solving the model for non-traded and traded goods
2.4.1   Deriving unassisted from assisted values
2.4.2   Non-traded goods
2.4.3   Traded goods

3   Assistance measurement with SALTER
3.1   Overview of SALTER
3.1.1   The database
3.2   Additional assumptions
3.2.1   Ad valorem commodity taxes
3.2.2   Assistance methodology and SALTER

4   Computer implementation
4.1   An overview of GEMPACK
4.2   Data from SALTER
4.2.1   Total sales
4.2.2   The value of material inputs
4.2.3   Calculation of depreciation by commodity, industry and source
4.2.4   Tariff rates
4.2.5   Export subsidy rates
4.3   Complications with TABLO
4.3.1   The structure of equations
4.4   Problems concerning data
4.4.1   Zero production
4.4.2   Non-traded goods
4.4.3   Negative unassisted value added

5   Results
5.1   International comparisons of results
5.2   More detailed sectoral results
5.2.1   Australia
5.2.2   New Zealand
5.2.3   Canada
5.2.4   The United States
5.2.5   Japan
5.2.6   The Republic of Korea
5.2.7   The European Community
5.2.8   The ASEAN

6   Summary


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