May Free Capital mobility before accession be unfavorable for admission to the EU ?
We examine the dynamics that may compensate the cost of redistribution policy in the European Union (EU), which is one of the obstacles for a candidate member country, namely Turkey to be admitted. We adress two main issues : i) may a total factor productivity (TFP) increases in the candidate country due to the positive effect of accession on institutional development compensate the cost of redistribution policy and ii) may free capital mobility before accession decrease EU’s incentive for admitting the candidate country. In a two-country model we assume that after Turkish accession, the European household gives a transfer to the Turkish household whereas an upwart TFP shift arises in Turkey due to the positive effect of accession on institutional development. We first find that a TFP increase in Turkey compensates the cost of transfer. Second, allowing for free capital mobility before accession turns out to be unfavorable for admission to the EU.
|Date of creation:||01 Dec 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium)|
Fax: +32 10473945
Web page: http://www.uclouvain.be/econ
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Buch, Claudia M. & Piazolo, Daniel, 2001.
"Capital and trade flows in Europe and the impact of enlargement,"
Elsevier, vol. 25(3), pages 183-214, September.
- Piazolo, Daniel & Buch, Claudia M., 2000. "Capital and Trade Flows in Europe and the Impact of Enlargement," Kiel Working Papers 1001, Kiel Institute for the World Economy (IfW).
- Claudia M. Buch & Daniel Piazolo, 2000. "Capital and Trade Flows in Europe and the Impact of Enlargement," Kiel Working Papers 1001, Kiel Institute for the World Economy.
- Dawson, John W, 1998. "Institutions, Investment, and Growth: New Cross-Country and Panel Data Evidence," Economic Inquiry, Western Economic Association International, vol. 36(4), pages 603-19, October.
- Bernard M. Hoekman & Togan Sübidey, 2005. "Turkey : Economic Reform and Accession to the European Union," World Bank Publications, The World Bank, number 7494, July.
- Francesco Caselli & Silvana Tenreyro, 2005.
"Is Poland the Next Spain?,"
NBER Working Papers
11045, National Bureau of Economic Research, Inc.
- Francesco Caselli & Silvana Tenreyro, 2006. "Is Poland the Next Spain?," NBER Chapters, in: NBER International Seminar on Macroeconomics 2004, pages 459-533 National Bureau of Economic Research, Inc.
- Francesco Caselli & Silvana Tenreyro, 2004. "Is Poland the next Spain?," Communities and Banking, Federal Reserve Bank of Boston.
- Francesco Caselli & Silvana Tenreyro, 2005. "Is Poland the Next Spain?," CEP Discussion Papers dp0668, Centre for Economic Performance, LSE.
- Caselli, Francesco & Tenreyro, Silvana, 2005. "Is Poland the Next Spain?," CEPR Discussion Papers 4877, C.E.P.R. Discussion Papers.
- Francesco Caselli & Silvana Tenreyro, 2005. "Is Poland the next Spain?," LSE Research Online Documents on Economics 3564, London School of Economics and Political Science, LSE Library.
- Harry Flam, 2003.
"Turkey and the EU: Politics and Economics of Accession,"
CESifo Working Paper Series
893, CESifo Group Munich.
- Flam, Harry, 2003. "Turkey and the EU: Politics and Economics of Accession," Seminar Papers 718, Stockholm University, Institute for International Economic Studies.
When requesting a correction, please mention this item's handle: RePEc:ctl:louvec:2007035. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne DAVISTER-LOGIST)
If references are entirely missing, you can add them using this form.