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

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  • Widgren, Mika
  • Sulamaa, Pekka

Abstract

This Paper examines the economic effects of the opening of the former Soviet Union. 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, to be beneficial for all EU regions without causing substantial welfare losses outside the Union. EU-Russia integration, on the other hand, has a 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.

Suggested Citation

  • Widgren, Mika & Sulamaa, Pekka, 2004. "EU Enlargement and Beyond: A Simulation Study on EU and Russia Integration," CEPR Discussion Papers 4720, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:4720
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    Cited by:

    1. Alho, Kari E.O. & Kaitila, Ville & Widgrén, Mika, 2005. "Speed of Convergence and Relocation: New EU Member Countries Catching up with the Old," Discussion Papers 963, The Research Institute of the Finnish Economy.
    2. Sulamaa, Pekka & Widgrén, Mika, 2005. "Asian Regionalism versus Global Free Trade: A Simulation Study on Economic Effects," Discussion Papers 985, The Research Institute of the Finnish Economy.
    3. Andreas Benedictow & Daniel Fjærtoft & Ole Løfsnæs, 2010. "Oil dependency of the Russian economy: an econometric analysis," Discussion Papers 617, Statistics Norway, Research Department.
    4. Sulamaa, Pekka & Widgrén, Mika, 2005. "Economic Effects of Free Trade between the EU and Russia," Discussion Papers 969, The Research Institute of the Finnish Economy.
    5. Susanna Kinnman & Magnus Lodefalk, 2009. "A Global Baltic:Potential Gains from Trade Liberalisation in the Baltic Sea States," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 9(1), pages 55-79, July.
    6. Alho, Kari E.O. & Kaitila, Ville & Widgrén, Mika, 2008. "Offshoring, Relocation and the Speed of Convergence in the Enlarged European Union," Discussion Papers 1156, The Research Institute of the Finnish Economy.
    7. Fontana, Marzia, 2006. "Modelling the gender effects of trade: current findings and ways forward," Conference papers 331535, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Kaitila, Ville, 2007. "Free Trade between the EU and Russia - Sectoral Effects and Impacts on Northwest Russia," Discussion Papers 1087, The Research Institute of the Finnish Economy.
    9. Benedictow, Andreas & Fjærtoft, Daniel & Løfsnæs, Ole, 2013. "Oil dependency of the Russian economy: An econometric analysis," Economic Modelling, Elsevier, vol. 32(C), pages 400-428.
    10. Bchir, Mohamed Hedi & Hammouda, Hakim Ben, 2008. "Does theory matters in Global CGE models," Conference papers 331807, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    More about this item

    Keywords

    European integration; Gtap model; Trade;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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