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Enlargement of the European Union: A movement towards the optimal trade bloc size?

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  • Glebe, Thilo W.

Abstract

This 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 countries’ 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.

Suggested Citation

  • Glebe, Thilo W., 2009. "Enlargement of the European Union: A movement towards the optimal trade bloc size?," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 10(2), pages 1-10.
    • Handle: RePEc:ags:aergaa:58061
    DOI: 10.22004/ag.econ.58061
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