On the Construction of an Intertemporal Model of Growth, Accumulation and Trade: Transitional Dynamics, Calibration Strategy and Simulation Analysis

A multi-region, dynamic computable general equilibrium model is \nintroduced to study issues of accumulation, growth, and consumer welfare in \nthe context of a global economy segmented into polar blocs. The model is \nbased on intertemporal optimization behavior of forward-looking Ramsey- consumers with three endogenously specified world regions -Rich, Poor, and \nMiddle-Income; and four aggregated sectors. We calibrate the model to the \nrecent GTAP data base, and present a simulation experiment addressing to the \ndynamic effects of a productivity decline in agriculture of the industrial Rich \nregion. We report both the transition and the steady state equilibrium paths \nfollowing the productivity shock.