Modelling North American Integration:
Pushing the Envelope of Reality
From: Living with Uncle
This chapter will introduce non-specialist readers to the theory and practice of CGE modelling. It will survey and reconsider the major predictions of CGE models regarding the effects of free trade in North America. It will compare those predictions to economic performance since liberalization. It is difficult to conclude decisively that the models were either right or wrong in their specific quantitative predictions, since even the more optimistic of the models expected gains from trade liberalization that would be too small to distinguish over time from normal fluctuations in economic data.
Jim Stanford is chief economist with the Canadian Auto Workers union. His research and analysis on a wide range of economic topics has been published in numerous academic and popular publications. He is the author of Paper Boom, CCPA/Lorimer, 1999. Jim Stanford writes regular column for the Globe and Mail. He is a research associate with the CCPA.