The economic impacts of trade liberalization and factor mobility: the case of the Philippines

This study uses the Global Trade Analysis Project (GTAP) model and database to investigate the effects of trade policies in conjunction with factor mobility on the Philippines economy. A total of six experiments were conducted: three trade strategies, each with two degrees of factor mobility. The conclusions are: (1) factor mobility results in a more efficient use of endowments in the economy; (2) lowering trade barriers shifts the pattern of production toward the most competitive sectors; and (3) lowering trade barriers leads to a more efficient distribution of endowment factors among sectors of production, which in turn results in a higher level of real output. (C) 2002 Society for Policy Modeling. Published by Elsevier Science Inc. All rights reserved.