ABSTRACT Title o f Dissertation: A Multisectoral Bilateral World Trade Model

This study presents the specification, estimation and historical simulation o f a multisectoral bilateral world trade model for 16 trading partners and 120 commodity categories. The model shows, for each trade flow, the country o f origin, the country o f destination, and the commodity traded. It is developed to provide the bilateral trade linkage among the national models in an international multisectoral modeling system. The trade model w ill take each country’s import demand by industry as given and focus on forecasting how much o f those imports w ill be supplied by each other country. The bilateral trade linkage ensures that trade forecasts are consistent from country to country. It also permits the analysis, at a high level o f disaggregation by commodity categories and by markets, o f specific changes in international competitive relations. The centerpiece o f the bilateral trade model is the so-called trade-shares matrix. Trade shares show, for a country importing a certain product, the proportions imported from each source country. As the trade shares are not constant over time, share equations have been developed in this study — one fo