Calibrating a CGE model with NTBs that Incorporates Standard Models of Modern Trade Theory

We propose a way to incorporate NTBs for the four workhorse models of the modern trade literature in computable general equilibrium models (CGEs). CGE models feature intermediate linkages and thus allow us to study global value chains (GVCs). We show that the Ethier-Krugman monopolistic competition model, the Melitz firm heterogeneity model and the Eaton and Kortum model can be defined as an Armington model with generalized marginal costs, generalized trade costs and a demand externality. As already known in the literature in both the Ethier-Krugman model and the Melitz model generalized marginal costs are a function of the amount of factor input bundles. In the Melitz model generalized marginal costs are also a function of the price of the factor input bundles. Lower factor prices raise the number of firms that can enter the market profitably (extensive margin), reducing generalized marginal costs of a representative firm. For the same reason the Melitz model features a demand externality: in a larger market more firms can enter. We implement the different models in a CGE setting with multiple sectors, intermediate linkages, non-homothetic preferences and detailed data on trade costs. We find the largest welfare effects from trade cost reductions in the Melitz model. We also employ the Melitz model to mimic changes in Non tariff Barriers (NTBs) with a fixed cost-character by analysing the effect of changes in fixed trade costs. While we work here with a model calibrated to the GTAP database, the methods developed can also be applied to CGE models based on the WIOD database.

The Social Imaginary of Culture/Civilization in the Arabic Literary Tradition

Charles Taylor’s contribution to social imaginaries offers an interpretive framework for better understanding modernity as secularity. One of its main aspects is conceiving of human society in linear, homogenous time (secular time). Looking into the Arabic intellectual tradition, I will argue in my paper that Taylor’s framework can help us understand major social and intellectual transformations. The Ottoman and Arabic modernization process during the 19th century has often been understood by focusing on certain core concepts. One of these is tamaddun, usually translated as “civilization.” I will be mostly talking about the works of two “pioneers” of Arab modernity (which is traditionally referred to as an-nahḍa, the so-called Arab Renaissance): the Syrian Fransīs Marrāsh and the Egyptian Rifāʿa aṭ-Ṭahṭāwī. First I will focus on Marrāsh’s didactic novel “The Forest of Truth” (1865), as it offers a complex view of tamaddun, which has sometimes been construed as merely a social and political reform program. The category of "social imaginary,” however, is useful in grasping the wider semantic scope of this concept, which is reading it as a signifier for human history conceived of in secular time, as Taylor defines it. This conceptualization of human history functioning within the immanent frame can also be observed in the introduction to “The Extraction of Pure Gold in the Description of Paris” (1834), a systematic account of a travel experience in France that was written by the other “pioneer,” aṭ-Ṭahṭāwī. Finally, in translating tamaddun as “the modern social imaginary of civilization/culture,” the talk aims to consider this imaginary as a major factor in the emergence of the “secular age.” Furthermore, it suggests the importance of studying (quasi-) literary texts, such as historiographical, geographical, and self-narratives in the Arabic literary tradition, in order to further elaborate continuities and ruptures in social imaginaries.