Poland's Membership in the European Union: An Analysis with a Dynamic Computable General Equilibrium (CGE) Model
This paper presents a dynamic Computable General Equilibrium (CGE) model for Poland's integration into the European Union (EU) that allows for quantification of income and welfare effects stemming from tariff reduction, border-cost reduction, reduction of technical barriers to trade and increased EU-transfers. For all channels, long-run income increases substantially compared with the reference scenario. The welfare effects are also positive, but much smaller because the welfare measure takes into account the time path of consumption throughout the adjustment period. Typical welfare effects are estimated at less than 1 percent of total consumption over time discounted to the beginning of the adjustment period. This low figure reflects the compression of consumption early in the adjustment period that finances the investment needed to build up the capital stock to support higher output and consumption farther into the future. The paper presents also sensitivity analyses for the CGE model concerning different specifications of the adjustment cost parameters, the intertemporal elasticity of substitution, the Armington substitution elasticity and the rate of time preference. The overall result of the examination of Poland's membership in the EU with the dynamic CGE model draws attention to the fact, that income growth effects as such are not necessarily welfare gains, since growth requires investment and therefore foregone consumption.
|Date of creation:||2000|
|Date of revision:|
|Contact details of provider:|| Postal: De Bériotstraat 34, B-3000 Leuven|
Phone: +32 (0) 16 / 32 6598
Fax: +32 (0) 16 / 32 6599
Web page: http://www.econ.kuleuven.be/licos
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.:
- Coleman Bazelon & Kent Smetters, 1999. "Discounting Inside the Washington D.C. Beltway," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 213-228, Fall.
- Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December.
- Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc.
- Cezary A Kapuscinski & Peter G Warr, 1996.
"Estimation of Armington Elasticities: An Application to the Philippines,"
Departmental Working Papers
1996-08, The Australian National University, Arndt-Corden Department of Economics.
- Kapuscinski, Cezary A. & Warr, Peter G., 1999. "Estimation of Armington elasticities: an application to the Philippines," Economic Modelling, Elsevier, vol. 16(2), pages 257-278, April.
- Cezary A. Kapuscinski & Prof Peter G. Warr, 1996. "Estimation of Armington Elasticities: An Application to the Philippines," Trade and Development 96/8, Australian National University, Department of Economics.
- Devarajan, Shantayanan & Go, Delfin S., 1998. "The Simplest Dynamic General-Equilibrium Model of an Open Economy," Journal of Policy Modeling, Elsevier, vol. 20(6), pages 677-714, December.
- McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
- Patrick J. Kehoe & Timothy J. Kehoe, 1994. "A primer on static applied general equilibrium models," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 2-16.
- Clinton R. Shiells & Kenneth A. Reinert, 1993. "Armington Models and Terms-of-Trade Effects: Some Econometric Evidence for North America," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 299-316, May.
- Harrison, Glenn W & Rutherford, Thomas F & Tarr, David G, 1997. "Quantifying the Uruguay Round," Economic Journal, Royal Economic Society, vol. 107(444), pages 1405-30, September.
- Reinert, Kenneth A. & Roland-Holst, David W., 1992. "Armington elasticities for United States manufacturing sectors," Journal of Policy Modeling, Elsevier, vol. 14(5), pages 631-639, October.
- Piazolo, Daniel, 1997. "Trade Integration between Eastern and Western Europe: Policies Follow the Market," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 259-297.
- Bhattarai, Keshab & Ghosh, Madanmohan & Whalley, John, 1999. "On some properties of a trade closure widely used in numerical modelling," Economics Letters, Elsevier, vol. 62(1), pages 13-21, January.
- Uzawa, H, 1969. "Time Preference and the Penrose Effect in a Two-Class Model of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 77(4), pages 628-52, Part II, .
- Norman, Victor D., 1990. "Assessing trade and welfare effects of trade liberalization : A comparison of alternative approaches to CGE modelling with imperfect competition," European Economic Review, Elsevier, vol. 34(4), pages 725-745, June.
- Uwe Walz, 1997. "Dynamic Effects of Economic Integration: A Survey," Open Economies Review, Springer, vol. 8(3), pages 309-326, July.
- Go, Delfin S., 1994. "External shocks, adjustment policies and investment in a developing economy: Illustrations from a forward-looking CGE model of the Philippines," Journal of Development Economics, Elsevier, vol. 44(2), pages 229-261, August.
- Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, June.
- Aymo Brunetti & Beatrice Weder, 1998. "Investment and institutional uncertainty: A comparative study of different uncertainty measures," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 134(3), pages 513-533, September.
- Willenbockel, Dirk, 1998. "Growth effects of anticipated trade liberalization and the Baldwin multiplier," Economics Letters, Elsevier, vol. 59(2), pages 231-235, May.
When requesting a correction, please mention this item's handle: RePEc:lic:licosd:8900. 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: ()
If references are entirely missing, you can add them using this form.