An incumbent country view on eastern enlargement of the EU Part II: The Austrian case
In part I of this paper, we have presented a general treatment of the welfare effect of an eastern EU enlargement on incumbent countries. Part II now takes a closer look at the Austrian case. We first present a few descriptive statistics on the role that east-west trade, as well as the pertinent trade barriers, play for the Austrian economy. We then argue that a numerical simulation, based on a suitably specified general equilibrium model, is an appropriate way towards a full evaluation of the welfare and distributional consequences of enlargement. Focusing on the Austrian case, we therefore implement an enriched and parameterized version of the general model used in part I of the paper. The model features savings and investment, based on intertemporal optimization, as well as sectoral allocation of capital and labor (skilled/unskilled), based on product differentiation and imperfect competition. In addition, the model incorporates a detailed representation of the government budget, featuring distortive taces and subsidies, as well as transfers to domestic households, and financial transactions with the EU. The model allows us to take a quantitative view on both the costs and integrations gains of en eastern enlargement. Relying on a Hicksian welfare measure which incorporates both long-run effects and short-run adjustment, our numerical simulations indicate that, in the Austrian case, the integration gains outweigh the fiscal burden.
|Date of creation:||Nov 2000|
|Contact details of provider:|| Fax: +43 732-2468-8238|
Web page: http://www.econ.jku.at/
More information through EDIRC
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.:
- André Sapir & Richard Baldwin & Daniel Cohen & Anthony Venables, 1999. "Market integration, regionalism and the global economy," ULB Institutional Repository 2013/8074, ULB -- Universite Libre de Bruxelles.
- Anderson, Kym & Tyers, Rodney, 1993. "Implications of EC Expansion for European Agricultural Policies, Trade and Welfare," CEPR Discussion Papers 829, C.E.P.R. Discussion Papers.
- Brown, D. & Deardorff & A. & Djankov, S. & Stern, R., 1995.
"An Economic Assessment of the Integration of Czechoslovakia, Hungary and Poland into the European Union,"
8, American Institute for Contemporary German Studies-.
- Deardoff, A.V. & Brown, D.K. & Stern, R.M. & Djankov, S.D., 1995. "An Economic Assessment of the Integration of Czechoslovakia, Hungary, and Poland into the Europan Union," Working Papers 380, Research Seminar in International Economics, University of Michigan.
- Ricahrd E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR;CES;MSH, vol. 12(24), pages 125-176, 04.
- Wilhelm Kohler, 2000. "Internationale Migration: Anmerkungen aus der Sicht der Aussenwirtschaftstheorie," Economics working papers 2000-22, Department of Economics, Johannes Kepler University Linz, Austria.
- Keuschnigg, Christian & Kohler, Wilhelm, 2002. "Eastern Enlargement of the EU: How Much Is It Worth for Austria?," Review of International Economics, Wiley Blackwell, vol. 10(2), pages 324-342, May.
- Keuschnigg, Christian & Kohler, Wilhelm K., 1998. "Eastern Enlargement of the EU: How much is it Worth for Austria?," CEPR Discussion Papers 1786, C.E.P.R. Discussion Papers.
- Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
- Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
- Hayashi, Fumio, 1982. "Tobin's Marginal q and Average q: A Neoclassical Interpretation," Econometrica, Econometric Society, vol. 50(1), pages 213-224, January.
- Fumio Hayashi, 1981. "Tobin's Marginal q and Average a : A Neoclassical Interpretation," Discussion Papers 457, Northwestern University, Center for Mathematical Studies in Economics and Management Science.