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A micro‐founded approach to exploring gains from trade integration: Evidence from 27 EU countries

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  • Michele Imbruno

Abstract

This paper studies how trade integration of both final output and intermediate input markets affected aggregate efficiency and welfare in the European Union (EU) during the period 2004–2012. The results suggest that aggregate efficiency gains from trade mainly occur through input switching effects within firms and output reallocation effects across firms. Moreover, welfare gains from trade are relatively smaller than aggregate efficiency gains, due to a decrease in domestic final varieties.

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  • Michele Imbruno, 2021. "A micro‐founded approach to exploring gains from trade integration: Evidence from 27 EU countries," The World Economy, Wiley Blackwell, vol. 44(3), pages 706-732, March.
    • Handle: RePEc:bla:worlde:v:44:y:2021:i:3:p:706-732
    DOI: 10.1111/twec.13027
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