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Implicit Trade Costs and European Single Market Enlargement

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Abstract

A major current issue in the economics of trade blocs is where the bloc is not just a customs union, but also incorporates substantial regulatory harmonisation or mutual recognition elements. The derivation of the costs of non-membership of such a bloc is not straightforward. In this paper I build on the assumption that observed trade pat- terns can be taken to reveal trading costs, and develop a model-consistent Dixit-Stiglitz general equilibrium-based calibration technique as an alternative to gravity methods previously used. I use the model to investigate numerically the likely trade e¤ects of the recent widening of the European Single Market to incorporate several Central and Eastern European Countries.

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  • T. Huw Edwards, 2005. "Implicit Trade Costs and European Single Market Enlargement," Discussion Paper Series 2005-04, Department of Economics, Loughborough University, revised May 2005.
    • Handle: RePEc:lbo:lbowps:2005-04
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. T. Huw Edwards, 2006. "Search and the Path-Dependency of Trade," Discussion Paper Series 2006_12, Department of Economics, Loughborough University, revised May 2006.
    4. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    5. Arjan Lejour & Ruud de Mooij & Richard Nahuis, 2001. "EU enlargement: economic implications for countries and industries," CPB Document 11, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Baldwin, Richard, 2000. "Regulatory Protectionism, Developing Nations and a Two-Tier World Trade System," CEPR Discussion Papers 2574, C.E.P.R. Discussion Papers.
    7. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. T. Huw Edwards, 2007. "Measuring Global and Regional Trade Integration in Terms of Concentration of Access," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(2), pages 256-276, July.
    2. ARMAN MAZHIKEYEV & Huw Edwards, 2015. "Consequences Of Asymmetric Deeper Eurasian Economic Integration," EcoMod2015 8365, EcoMod.
    3. Jones, Jonathan & Serwicka, Ilona & Wren, Colin, 2018. "Economic integration, border costs and FDI location: Evidence from the fifth European Union enlargement," International Review of Economics & Finance, Elsevier, vol. 54(C), pages 193-205.

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    More about this item

    Keywords

    Protection; General Equilibrium; European Union.;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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