Welfare Effects of `1992': A General Equilibrium Assessment for EC and EFTA Countries

Jan I. Haaland

No 828, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In this paper production, trade and welfare effects of European integration are discussed, with particular emphasis on the effects for the EC and EFTA. Insight from previous partial and general equilibrium analyses of the internal market are reviewed, and new model simulations are presented. In addition to the `standard' experiments of `1992' as reduced trade costs and as full market integration for the EC alone, and for the European Economic Area (EEA), an intermediate case, with full integration in the EC but only lower trade costs between the EC and EFTA, is analysed. All cases show that EFTA will benefit significantly from freer trade and closer integration with the EC. With regard to non-European regions, the simulations of European integration show some degree of trade diversion, but stylized model experiments indicate that a successful outcome of the Uruguay Round may more than offset the trade-diverting effects of `1992'.

Keywords: EC; Economic Integration; EFTA; European Economic Area (EEA); GATT (search for similar items in EconPapers)
JEL-codes: D58 F12 F13 F15 F17 (search for similar items in EconPapers)
Date: 1993-07
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Citations: View citations in EconPapers (4)

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