Moekti P. Soejachmoen: The paper enriches the breadth of study on South Asian and Southeast Asian integration with a computable general equilibrium (CGE) approach, which can provide useful policy prescriptions for countries in those regions.
As with other CGE studies, the results depend heavily on the chosen assumption and base year. This study chose 2010 as base year, which directly follows the 2008–09 global financial crisis. Therefore it limits a bias from this crisis, although most of the related Asian countries were not significantly affected by it. The study uses a model that incorporates recent innovations in heterogeneous firm trade theory, where the firms are heterogeneous in productivity. This enables the model to reflect intra-industry changes when trade liberalization happens. By choosing this model, the results will be more realistic and provide more precise directions for policies.
In each scenario in this model, all countries have uniform tariff reduction and...