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Worthy Transfers? A Dynamic Analysis of Turkey's Accession to the European Union

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  • Gul Ertan Ozguzer

    (Department of Economics, Izmir University of Economics)

  • Luca Pensieroso

    (Department of Economics, IRES - Universite catholique de Louvain)

Abstract

We build a two-country dynamic general equilibrium model to study whether European citizens would bene t from the eventual accession of Turkey to the European Union. The results of the simulations show that Turkey's accession to the European Union is welfare enhancing for Europeans, provided that Turkish total factor productivity (TFP) increases suciently after enlargement. In the model with no capital mobility, the Europeans are better o if the Turkish TFP increase bridges more than 31% of the initial TFP gap between Turkey and the European Union. That gure becomes 45% when capital mobility is introduced.

Suggested Citation

  • Gul Ertan Ozguzer & Luca Pensieroso, 2010. "Worthy Transfers? A Dynamic Analysis of Turkey's Accession to the European Union," Working Papers 1003, Izmir University of Economics.
    • Handle: RePEc:izm:wpaper:1003
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    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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