This SCEPA Policy Note is based on the authors' 2006 paper for Oxfam International titled, "Modeling the Impact of Trade Liberalization: A Critique of Computable General Equilibrium Models." The principal concern of this paper is that projected welfare gains from trade liberalization are derived from global computable general equilibrium (CGE) models, which are based on highly unrealistic assumptions. In this Policy Note, the authors analyze the foundation of CGE models and argue that their predictions are often misleading. They find that any possible Doha trade agreement is likely to introduce substantial macroeconomic risk for developing countries, and particularly sub-Saharan Africa.

August 11, 2007.