Enlargement of the European Union: A movement towards the optimal trade bloc size?
AbstractThis paper analyses how the enlargement of a trade bloc will affect national welfare. We establish a partial equilibrium model of a trade bloc either operating as a monopoly with a competitive fringe or facing a duopolistic game in production taxes/subsidies. Given this framework, we demonstrate how member countriesâ€™ welfare effects depend on their trade flow and the market power of the trade bloc. A numerical estimation of the effects of EU enlargement on the major grain crop markets suggests that welfare effects are negligible. Economic reasons are therefore unlikely to be a motivating force for further enlargement.
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Bibliographic InfoArticle provided by Greek Association of Agricultural Economists in its journal Agricultural Economics Review.
Volume (Year): 10 (2009)
Issue (Month): 2 (June)
trade bloc; trade liberalisation; game theory; European Union; International Relations/Trade; D42; F11; Q17; Q18;
Find related papers by JEL classification:
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
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