Thomas F. Rutherford

Bio: Thomas F. Rutherford is an academic researcher from University of Wisconsin-Madison. The author has contributed to research in topics: Computable general equilibrium & General equilibrium theory. The author has an hindex of 47, co-authored 188 publications receiving 8179 citations. Previous affiliations of Thomas F. Rutherford include University of Colorado Denver & Wisconsin Institutes for Discovery.

Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: AnOverview of the Modeling Framework and Syntax

Abstract: This paper describes a programming environment for economic equilibrium analysis. The system introduces the Mathematical Programming System for General Equilibrium analysis (MPSGE, Rutherford 1987) within the Generalized Algebraic Modelling System (GAMS, Brooke, Kendrick and Meeraus (1988)). This arrangement exploits GAMS‘ set-oriented algebraic syntax for data manipulation and report writing. The system based on the tabular MPSGE input format provides a compact, non-algebraic representation of a model‘s nonlinear equations. This paper provides an overview of the modelling environment and three worked examples in tax policy analysis.

Quantifying the Uruguay Round

Abstract: The effects of the Uruguay Round are quantified using a numerical general equilibrium model which incorporates increasing returns to scale, 24 regions, 22 commodities, and steady state growth effects. We conclude that the aggregate welfare gains from the Round are in the order of 96 billion per year in the short run, but could be as high as 171 billion per year in the long run after capital stocks have optimally adjusted. Despite these global gains, we identify some developing countries that lose from the Round in the short run. In the long run, almost all gain, and the Round will allow developing countries to gain further through their own unilateral liberalisation. Available as the journal article at http://www.blackwell-synergy.com/loi/ecoj

The Boundaries of Multinational Enterprises and the Theory of International Trade

Abstract: This paper begins with a review of empirical evidence on multinational firms. Conceptual underpinnings of a theory are developed, relying in particular on the notion of knowledge capital as a mobile, joint input into geographically separated production facilities. This idea is embedded in a simple two-country general equilibrium model that supports multinational production in equilibrium under conditions consistent with the empirical evidence. The final section examines internalization and shows why certain properties of knowledge capital also imply a preference for transferring technologies internally within the firm, rather than through arm's-length markets.

Globalization and the gains from variety

Abstract: Since the seminal work of Krugman (1979), product variety has played a central role in models of trade and growth. In spite of the general use of love-of-variety models, there has been no systematic study of how the import of new varieties has contributed to national welfare gains in the United States. In this paper we show that the unmeasured growth in product variety from US imports has been an important source of gains from trade over the last three decades (1972-2001). Using extremely disaggregated data, we show that the number of imported product varieties has increased by a factor of four. We also estimate the elasticities of substitution for each available category at the same level of aggregation, and describe their behavior across time and SITC-5 industries. Using these estimates we develop an exact price index and find that the upward bias in the conventional import price index is approximately 1.2 percent per year – double the estimated impact due to hedonic adjustments on the CPI. The magnitude of this bias suggests that the welfare gains from variety growth in imports alone are 2.8 percent of GDP per year.