Tarr, David G.2014-08-292014-08-292012-03https://hdl.handle.net/10986/19869With the growing importance of services and foreign direct investment in services, it is important to have a framework to analyze the impact of the liberalization of barriers to foreign direct investment in services. This paper summarizes several recent papers and builds policy-based computable general equilibrium models showing the dynamics of services, foreign direct investment and the endogenous productivity effect from services. The modeling framework shows that the liberalization of barriers against foreign direct investment in services yields welfare gains several times larger than the usual estimates from traditional computable general equilibrium models, which focus on goods trade, not foreign direct investment in services. The larger estimates are consistent with econometric evidence on the gains from services liberalization. The paper begins with a small stylized model to help understand the fundamental economics. Then it describes models developed at the request of the Russian government to assess the potential impact of Russia's accession to the WTO. Reviews of the work indicated that the modeling helped the Russian government gain public support for the WTO entry. The paper also describes a new technique that allows modelers to include tens of thousands of households in the model.en-USCC BY 3.0 IGOACCESS TO SERVICESACCOUNTANTACCOUNTINGADVANCED COUNTRIESAGGREGATE SUPPLYAGRICULTUREAVERAGE COSTSBALANCE OF TRADEBARRIERBARRIERS TO INVESTMENTBASE YEARBASKET OF GOODSBENCHMARKBIDSBINDING CONSTRAINTBUSINESS SERVICEBUSINESS SERVICESBUYERSCAPITAL FLOWSCAPITAL STOCKCAPITAL STOCKSCLOSED ECONOMIESCOMPARATIVE ADVANTAGECOMPETITIVE MODELSCOMPETITIVENESSCOMPOSITE SERVICESCONSTANT RETURNS TO SCALECONSUMERSCOST FUNCTIONSCOST REDUCTIONCOST STRUCTURECOST STRUCTURESCOUNTRY OF ORIGINCUSTOMSDELIVERY OF SERVICESDELIVERY SERVICESDEMAND CURVEDEMAND FUNCTIONDEMAND FUNCTIONSDERIVATIVEDERIVATIVESDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDEVELOPMENT FINANCEDEVELOPMENT POLICYDOMESTIC ECONOMYDOMESTIC MARKETDOMESTIC PRICEDOMESTIC PRICESDUMPINGECONOMIC ACTIVITYECONOMIC GEOGRAPHYECONOMIC PERFORMANCEECONOMICS LITERATUREELASTICITYELASTICITY OF SUBSTITUTIONELASTICITY OF SUPPLYELECTRICITYEQUILIBRIUMEQUILIBRIUM VALUESEQUIPMENTEXCHANGE RATEEXPENDITURESEXPORT COMPETITIVENESSEXPORT MARKETEXPORT MARKETSEXPORTERSEXTERNALITIESEXTERNALITYFACTORS OF PRODUCTIONFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL SUPPORTFIRM PERFORMANCEFIXED COSTFIXED COSTSFIXED PRICESFIXED RATEFOREIGN BANKSFOREIGN COMPETITIONFOREIGN DIRECT INVESTMENTFOREIGN DIRECT INVESTORSFOREIGN FIRMFOREIGN FIRMSFOREIGN INPUTFOREIGN INPUTSFOREIGN INVESTORSFOREIGN TRADEGDPGEOGRAPHIC SCOPEGLOBAL DEVELOPMENT FINANCEGOOD GOVERNANCEGROWTH RATEGROWTH RATESGROWTH THEORYHOME COUNTRYHOMOGENEOUS GOODHORIZONTAL RESTRICTIONSIMPERFECT COMPETITIONINCREASING RETURNSINCREASING RETURNS TO SCALEINDIVIDUAL FIRMINDIVIDUAL FIRMSINDUSTRIAL COUNTRIESINSURANCEINSURANCE COMPANIESINSURANCE MARKETSINTERMEDIATE GOODSINTERMEDIATE PRODUCTSINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINTERNATIONAL ECONOMICSINTERNATIONAL TRADEINVESTMENT FLOWSJOINT VENTUREMANUFACTURINGMARGINAL COSTMARGINAL COSTSMARGINAL PRODUCTMARGINAL PRODUCTIVITYMARGINAL REVENUEMARKET ACCESSMARKET POWERMARKET PRICESMARKET REFORMSMARKET SHAREMARKET SIZEMARKETINGMOBILE TELEPHONEMONETARY FUNDMONOPOLISTIC COMPETITIONMONOPOLYNATIONAL INCOMENET EXPORTSOPEN ACCESSOPEN ECONOMIESOPEN ECONOMYOUTPUTPOST OFFICEPRICE INDEXPRODUCT DIFFERENTIATIONPRODUCTION FUNCTIONPRODUCTION PROCESSPRODUCTION STRUCTUREPRODUCTION STRUCTURESPRODUCTIVITYPRODUCTIVITY GROWTHPRODUCTIVITY INCREASESPURCHASINGQUOTA RENTSR&DRATE OF RETURNRATE OF RETURN ON CAPITALREAL EXCHANGE RATERED TAPEREDUCTION OF COSTREGIONAL TRADEREGULATORY BARRIERSREGULATORY ENVIRONMENTRESULTRESULTSRETAILRETAIL TRADESALESSECURITIESSENSITIVITY ANALYSISSERVICE PROVIDERSSHARE OF CAPITALSKILLED WORKERSSMALL COUNTRIESSMALL COUNTRYSPREADSUBSTITUTESUBSTITUTESSUBSTITUTION EFFECTSUPPLIERSSUPPLY CURVESTARIFF BARRIERSTARIFF REVENUETAXTAX RATETAX REVENUESTECHNICAL EXPERTISETECHNOLOGICAL CHANGETELECOMMUNICATIONTELECOMMUNICATIONSTELECOMMUNICATIONS PROVIDERSTELEPHONETELEPHONE SERVICETELEPHONE SERVICESTIME FRAMETOTAL COSTSTOTAL FACTOR PRODUCTIVITYTRADE BALANCETRADE LIBERALIZATIONTRADE NEGOTIATIONSTRADE POLICYTRADE REGIMETRADINGTRANSITION COUNTRIESUSERSUSESUTILITY FUNCTIONVALUE ADDEDVARIABLE COSTVARIABLE COSTSWORLD MARKETWORLD TRADEWORLD TRADE ORGANIZATIONWTO10.1596/1813-9450-6012