Agricultural trade liberalization in a world of uncertainty: discussion of the results of a world CGE model

In this paper, we try to evaluate the change in welfare gains due to agricultural trade liberalization when imperfect information is considered. The results of two versions of a CGE model, using GTAP database and representing goods as well as capital flows, are compared. In the first one, a standard world CGE approach is followed. In the second version we included risk aversion, imperfect information and production lag in the agricultural sector. After a brief description of the two versions, changes in welfare, represented by the income of two types of household (middle-low and middle-high) in three regions (Europe, United States, Rest of the World) after agricultural trade liberalization are presented. Theoretical and political consequences of the results are discussed