Positive Agricultural and Food Trade Model with Ad Valorem Tariffs

Interest rate Ad valorem tariffs are considered as the most prominent trade tools extensively used in the framework of Spatial Equilibrium Models (SEMs) to analyze agricultural and food trade policies around the world. However the results obtained from such models have been criticized because of their inadequacy in producing any observed data within the base period. Hence a positive spatial and temporal trade model which incorporates ad valorem tariffs was developed throughout the ongoing study. The calibrated model helps researchers to perform a substantially flawless empirical trade study in the real world. A numerical example is finally presented at the end of the article to justify the findings of the model, and to compare welfare analysis of the calibrated vs. the uncalibrated model.