The Accession of the UK to the EC: A Welfare Analysis

23 Pages Posted: 18 Oct 2012

See all articles by Michael Gasiorek

Michael Gasiorek

University of Sussex

Alasdair Smith

University of Sussex

Anthony J. Venables

University of Oxford; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2002

Abstract

This article provides a decomposition of the welfare impact on the UK arising from the changes in manufacturing trade consequent upon joining the EC. The methodology employed is that of computable general equilibrium (CGE) modelling, where the underlying model is based on trade under imperfect competition with firms producing under conditions of increasing returns to scale. CGE models can be seen as providing numerical illustrations of theory, or as empirical tools providing estimates of policies. A second aim of this article is then to asses the extent to which CGE models can be used as serious tools of policy analysis. We examine this by assessing the success of the model in replicating counterfactual outcomes. The results indicate (i) that the model does reasonably well in replicating complex reality and that such models can be empirically useful; (ii) that a substantial portion of the welfare impact is attributed to distortions associated with imperfect competition, and that the impact is potentially quite large.

Suggested Citation

Gasiorek, Michael and Smith, Alasdair and Venables, Anthony J., The Accession of the UK to the EC: A Welfare Analysis (September 2002). JCMS: Journal of Common Market Studies, Vol. 40, Issue 3, pp. 425-447, 2002. Available at SSRN: https://ssrn.com/abstract=2163342 or http://dx.doi.org/10.1111/1468-5965.00363

Michael Gasiorek (Contact Author)

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

Alasdair Smith

University of Sussex

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

Anthony J. Venables

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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