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Abstract:
This paper explores the economic consequences of the enlargement of the European Union with countries from Central and Eastern Europe. We focus on integration aspects that go beyond the reduction of formal trade barriers, namely accession to the internal market and free movement of labour. The economic implications for sixteen industries in several European countries are assessed by using WorldScan, a CGE model for the world economy. The results suggest that the candidate member states will gain substantially from accession to the internal market, although some sectors in these countries will shrink. Most EU countries will experience small welfare increases. We also find that the internal market effects are large compared to the economic effects of removing formal trade barriers and migration.

Abstract:
We explore the economic implications of the possible Turkish accession to the European Union. We focus on three main changes associated with Turkish membership: (i) accession to the internal European Market; (ii) institutional reforms in Turkey triggered by EU membership; and (iii) migration in response to the free movement of workers. Overall, the macroeconomic implications for EU countries are small but positive. European exports increase by around 20 percent. Turkey experiences larger economic gains than the EU: consumption per capita is estimated to rise by about 4 percent as a result of accession to the internal market and free movement of labour. If Turkey would succeed in reforming its domestic institutions in response to EU-membership, consumption per capita in Turkey could raise by an additional 9 percent. These benefits would spill over to the EU.

Turkey, regional economic integration, general equilibrium model, gravity equations, institutional reform, migration

Abstract:
We explore the economic implications of the possible Turkish accession to the European Union. We focus on three main changes associated with Turkish membership: (i) accession to the internal European Market; (ii) institutional reforms in Turkey triggered by EU-membership; and (iii) migration in response to the free movement of workers. Overall, the macroeconomic implications for EU countries are small but positive. European exports increase by around 20%. Turkey experiences larger economic gains than the EU: consumption per capita is estimated to rise by about 4% as a result of accession to the internal market and free movement of labour. If Turkey would succeed in reforming its domestic institutions in response to EU-membership, consumption per capita in Turkey could raise by an additional 9%. These benefits would spill over to the EU.

Abstract:
We explore the relationship between openness and growth by taking a closer look at trade-related knowledge spillovers at the industry level. First, we estimate the relation between sectoral R&D expenditures, trade-related spillovers, and growth. Next, we incorporate these R&D linkages in a computable general-equilibrium model for the world economy. We simulate trade liberalization in the model with R&D spillovers and compare the effects on GDP in different regions with a non-R&D-based model simulation. We find that the GDP effects of trade liberalization are magnified considerably by R&D spillovers for some regions - notably Japan and Southeast Asia. In other regions, such as China, the additional GDP effects are modest. These findings can be traced back to changing specialization and import patterns.

Abstract:
In a two-country model with mobile capital we analyze decentralized social insurance policies. These policies are a compromise between the preferences of workers and capital owners. Due to wage bargaining, worker-based social insurance contributions are borne by capital owners. These contributions affect the profitability of investment, and consequently the direction and size of capital flows. Countries will take account of these effects in determining social insurance policy. Noncooperative decision making results in tax competition and an underprovision of social insurance. In addition, increasing economic integration, represented by increasing capital mobility, could imply a divergence of social insurance levels in the two countries.