Dynamic Effects of Agriculture Trade in the Context of Domestic and Global Liberalisation: A CGE Analysis for Pakistan

This paper studies dynamic effects of agriculture trade in the context of domestic and global liberalisation. Being the largest sector of the economy, the agriculture sector contributes substantially to the growth process. Using a small CGE model for Pakistan and a 2002 Pakistan Social Accounting Matrix as data base, the simulations are conducted to measure the effects of domestic agriculture trade liberalisation in isolation and in conjunction with changes in the world economy. The novelty of this paper is that it introduces dynamics in the Pakistani CGE model through capital accumulation. The results illuminate the greater effectiveness of agriculture trade liberalisation in promoting the overall growth process, given increased market access because of liberalisation in the world economy.