Eastern Enlargement of the EU : A Comprehensive Welfare Assessment
AbstractThis paper takes a welfare-view on eastern enlargement of the EU, focusing on incumbent countries. Enlargement is decomposed into three elements: Single-market integration on commodity markets, budgetary costs from EU-expenditure policies, and singlemarket- induced migration from new to present member countries. I first use an analytical model to derive a welfare equation that identifies the principle channels for incumbent country welfare gains and losses from enlargement, including product differentiation, capital accumulation, and unemployment due to search-costs. I then propose a method that allows to extend welfare results obtained from a detailed calibrated version of this model for Germany to other incumbent countries. The approach relies on model elasticities extracted from the German model which are then applied to other countries´ idiosyncratic "enlargement-shocks". Constructing detailed indices for such country specific "enlargement-shocks", I arrive at characteristic inter-country pattern of enlargement- induced welfare effects for all EU15 countries. Aggregating these across countries reveals enlargement to be beneficial for the union as a whole, although several countries stand to suffer welfare losses. --
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Bibliographic InfoPaper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 260.
Date of creation: 2004
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Web page: http://www.econstor.eu/handle/10419/20
More information through EDIRC
EU Enlargement; Economic Integration; Commercial Policy; Migration; Welfare Analysis; Computable General Equilibrium; Search Unemployment;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F15 - International Economics - - Trade - - - Economic Integration
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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