Year: 2012
Type: article
Abstract: 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 multi-sector Ricardian model implemented on 75 countries, and compare welfare in the 2000s to a counterfactual scenario in which Eastern European countries are closed to trade. For Western European countries, the mean welfare gain from trade integration with Eastern Europe is 0.1%, ranging from zero for Portugal to 0.35% for Austria. Comparative advantage is a key determinant of the variation in these welfare gains: countries whose comparative advantage is most similar to Eastern Europe tend to gain the least, while countries with technology most different from Eastern Europe gain the most.
Source: Economic Policy
Authors: Andrei A. Levchenko, Jing Zhang
Institutions: National Bureau of Economic Research, University of Michigan
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2136532749