Comparative Advantage and the Welfare Impact of European Integration
Andrei Levchenko and
Jing Zhang ()
No 18061, NBER Working Papers from National Bureau of Economic Research, Inc
This paper investigates the welfare gains from European trade integration, and the role of comparative advantage in determining the magnitude of those gains. We use a multisector Ricardian model implemented on 79 countries, and compare welfare in the 2000s to a counterfactual scenario in which East European countries are closed to trade. For West European countries, the mean welfare gain from trade integration with Eastern Europe is 0.16%, rang- ing from zero for Portugal to 0.4% for Austria. For East European countries, gains from trade are 9.23% at the mean, ranging from 2.85% for Russia to 20% for Estonia. For Eastern Europe, comparative advantage is a key determinant of the variation in the welfare gains: countries whose comparative advantage is most similar to Western Europe tend to gain less, while countries with technology most different from Western Europe gain the most.
JEL-codes: F11 F14 F15 (search for similar items in EconPapers)
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Published as Andrei A. Levchenko & Jing Zhang, 2012. "Comparative advantage and the welfare impact of European integration," Economic Policy, CEPR & CES & MSH, vol. 27(72), pages 567-602, October.
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Journal Article: Comparative advantage and the welfare impact of European integration (2012)
Working Paper: Comparative Advantage and the Welfare Impact of European Integration (2012)
Working Paper: Comparative Advantage and the Welfare Impact of European Integration (2011)
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