Replaced with revised version of paper 12/06/06.

We analyze the impact of trade liberalization and removal of the federal tax credit in the United States on U.S. and Brazilian ethanol markets using a multi-market international ethanol model calibrated on 2005 market data and policies. The removal of trade distortions induces a 23.9 percent...

The paper presents an extended gravity equation application for the global trade with ethanol.The background and different attempts for a theoretical foundation of the standard approachare discussed. The econometric work takes regional integration schemes into account, as wellas the influence of...