FORMATH
Online ISSN : 2188-5729
Original Article
Effects of Simultaneous Reductions in Japanese, US, and Chinese Intermediate Demands for Electricity on Patterns of Specialization -An Examination Using a Ricardian Model Including Intermediate Goods-
Ejiri Yozaburo
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Volume 13 (2014) Pages 1-19

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Abstract

This study simulates changes in the patterns of specialization that maximize total GDP in trade areas when Japan, the US, and China simultaneously implement targeted reductions in intermediate demand for electricity. The following conclusions are drawn from the simulation results. As the reduction rate of intermediate demand for electricity in Japan decreases (i.e., as the degree of Japanese targeted reduction increases), 1) the comparative disadvantage of the Japanese forestry sector changes to a comparative advantage; 2) the weak comparative advantage of the US forestry sector changes to a comparative disadvantage; 3) US agriculture never loses its comparative advantage; 4) the comparative advantages of Japanese metal products and transportation equipment sectors change to comparative disadvantages; and 5) corresponding to the change in item 4, the comparative disadvantages of US metal products and transportation equipment sectors change to comparative advantages. These results hold not only in the case in which only Japan imposes restrictions but also in the case in which the US and China also impose restrictions simultaneously. Moreover, these results hold within wide ranges of reduction rates in the US and China.

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