Trade Elasticities for CGE Simulation: Case of U.S. Tariff Shocks

Trade Elasticities for CGE Simulation: Case of U.S. Tariff Shocks | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Trade Elasticities for CGE Simulation: Case of U.S. Tariff Shocks Yutaro Kimata, Ken Itakura This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8716311/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 5 You are reading this latest preprint version Abstract Evaluating the economic impact of trade policy in computable general equilibrium (CGE) models relies on the trade elasticities. This study builds a new, internally consistent database of trade elasticities that can be directly integrated into the CGE framework. We estimate a structural gravity model by Poisson pseudo maximum likelihood (PPML), using bilateral HS6 trade flows and applied tariff rates. The estimation yields elasticities for approximately 5,000 HS6 products, covering nearly the entire classification. The median elasticity is 5.28, and the 10th to 90th percentile span is 1.49 to 15.33, underscoring pronounced heterogeneity in price sensitivity. Each product is mapped to one of the 47 GTAP goods sectors, and the resulting elasticities are compared with the region-generic default values. The simulation experiments on U.S. tariff shocks are conducted using the estimated elasticities as well as the GTAP default parameters. The results reveal that the difference in elasticity affects bilateral imports of goods the most, leading to sign reversals of macroeconomic variables, including GDP, economic welfare, and real income for some countries. Trade Elasticity CGE Import tariffs Full Text Cite Share Download PDF Status: Under Review Version 1 posted Editorial decision: Major revision 16 Mar, 2026 Reviewers agreed at journal 11 Feb, 2026 Reviewers invited by journal 04 Feb, 2026 Editor assigned by journal 03 Feb, 2026 First submitted to journal 30 Jan, 2026 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8716311","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":585583278,"identity":"fa6e62f7-2b08-4604-a761-0f06e944f2d7","order_by":0,"name":"Yutaro Kimata","email":"data:image/png;base64,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","orcid":"","institution":"Nagoya City University: Nagoya Shiritsu Daigaku","correspondingAuthor":true,"prefix":"","firstName":"Yutaro","middleName":"","lastName":"Kimata","suffix":""},{"id":585583279,"identity":"3f272b66-ecd9-4d79-94ef-32c7b998b9cf","order_by":1,"name":"Ken Itakura","email":"","orcid":"","institution":"Nagoya City University: Nagoya Shiritsu Daigaku","correspondingAuthor":false,"prefix":"","firstName":"Ken","middleName":"","lastName":"Itakura","suffix":""}],"badges":[],"createdAt":"2026-01-28 04:42:03","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-8716311/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8716311/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":102084717,"identity":"7b4559e0-0e93-4ec5-8d9c-db60c40549ad","added_by":"auto","created_at":"2026-02-07 03:24:48","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":318522,"visible":true,"origin":"","legend":"","description":"","filename":"Manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8716311/v1_covered_2f309c69-28ad-404b-9de6-d3e53dc05648.pdf"}],"financialInterests":"","formattedTitle":"Trade Elasticities for CGE Simulation: Case of U.S. Tariff Shocks","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":true,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"journal-of-economic-structures","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"jecs","sideBox":"Learn more about [Journal of Economic Structures](http://journalofeconomicstructures.springeropen.com)","snPcode":"","submissionUrl":"https://www.editorialmanager.com/jecs/default.aspx","title":"Journal of Economic Structures","twitterHandle":"@SpringerOpen","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"em","reportingPortfolio":"BMC/SO AJ","inReviewEnabled":true,"inReviewRevisionsEnabled":true},"keywords":"Trade Elasticity, CGE, Import tariffs","lastPublishedDoi":"10.21203/rs.3.rs-8716311/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8716311/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eEvaluating the economic impact of trade policy in computable general equilibrium (CGE) models relies on the trade elasticities. 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