Comparative Advantage of IRAN; s Auto Industry Outputs Using Policy Analysis Matrix (PAM) and Computable General Equilibrium Model (CGE)

Moeennemati, Hassan

doi:10.22059/jte.2014.50541

Comparative Advantage of IRAN; s Auto Industry Outputs Using Policy Analysis Matrix (PAM) and Computable General Equilibrium Model (CGE)

Document Type : Research Paper

Author

Hassan Moeennemati

Assistant Professor, Department of Accounting, Tehran Islamic Azad University, Iran

10.22059/jte.2014.50541

Abstract

In this paper for calculating Policy Analysis Matrix parameters, with regard to real or shadow prices, we pay attention to variation of endogenous variables, using results of CGE model. The results of the study indicated that,in output market, because of government policies, there are implicit tax on products of IRAN;s auto industry. But inputs of auto industry, benefits from government subside and protections. The results show that Domestic Resource Cost index (DRC) for auto industry is less than one. it means that outputs of IRAN;s auto industry have potential comparative advantage. Effective Protection Coefficient (EPC) is less than one too. it indicated that, on the whole lot, auto industry, does not benefit from government protections.

Keywords

Comparative Advantage

Computable General Equilibrium Model (CGE)

Policy Analysis Matrix (PAM)

Social Accounting Matrix(SAM)