Abstract
This study estimate influences of the tariff elimination on the Japanese economy and forestry sector using the comparative static CGE model. We used the 2015 Extended Input-Output Table (2011 basis) for Japan published by the Ministry of Internal Affairs and Communications to create a social accounting matrix (SAM). The results showed that tariff elimination leads to increases in GDP and Equivalent Variation, which shows the degree of improvement of utility level of household budget, of 0.026 % and 0.146 % respectively, indicating vitalization of the Japanese economy. Conversely, tariff elimination decreased domestic consumption and production of the forestry sector, mainly the plywood and glued laminated timber sector, suggesting shrinkage of the forestry sector. Furthermore, sensitivity analysis was performed to examine the effect of uniform elasticity, set regardless of SAM, on estimations. Results imply that although there is little robustness in the estimations of the degree of impact, there is some robustness in the estimations of signs of change.
