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EU-Enlargement and Beyond: A Simulation Study on EU and Russia Integration

  • Pekka Sulamaa


  • Mika Widgrén


This paper examines the economic effects of the opening of the Russian Federation. The analysis carried out in the paper is two-fold. First we simulate the impact of the eastern enlargement of the EU and, second, we analyse how deeper integration between the EU and Russia contributes to this. The analysis is carried out with GTAP computable general equilibrium model. We find that there is a trade-off between the two roads of European integration arrangements. Eastern enlargement seems, even in its very deep form, be beneficial for all EU regions without causing substantial welfare losses outside the Union. EU-Russia integration, on the other hand, has different impact. To be beneficial for Russia free trade between the EU and Russia requires improved productivity in the latter, which may be due to better institutions or increased FDI. This might make the negotiations of the agreement cumbersome and if agreed its implementation difficult.

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Article provided by Springer in its journal Empirica.

Volume (Year): 31 (2004)
Issue (Month): 4 (December)
Pages: 307-323

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Handle: RePEc:kap:empiri:v:31:y:2004:i:4:p:307-323
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  6. Paul S. Armington, 1969. "A Theory of Demand for Products Distinguished by Place of Production (Une théorie de la demande de produits différenciés d'après leur origine) (Una teoría de la demanda de productos distinguiénd," IMF Staff Papers, Palgrave Macmillan, vol. 16(1), pages 159-178, March.
  7. Hanoch, Giora, 1975. "Production and Demand Models with Direct or Indirect Implicit Additivity," Econometrica, Econometric Society, vol. 43(3), pages 395-419, May.
  8. SULAMAA Pekka & WIDGRÉN Mika, . "EU Enlargement and Beyond: A Simulation Study on EU and CIS Integration," EcoMod2003 330700143, EcoMod.
  9. Risto Vaittinen, 2004. "Trade Policies and Integration - Evaluations with CGE Models," Research Reports 109, Government Institute for Economic Research Finland (VATT).
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