Macroeconomic Scenarios for the Euro-Mediterranean Area: Quantification Based on the GEM-E3 Model

MEDPRO Report No. 7/July 2013

135 Pages Posted: 10 Aug 2013

See all articles by Leonidas Paroussos

Leonidas Paroussos

National Technical University of Athens (NTUA) - School of Electrical and Computer Engineering

Kostas Fragkiadakis

National Technical University of Athens (NTUA) - School of Electrical and Computer Engineering

Ioannis Charalampidis

National Technical University of Athens (NTUA) - School of Electrical and Computer Engineering

Stella Tsani

Athens University of Economics and Business

Pantelis Capros

National Technical University of Athens (NTUA) - School of Electrical and Computer Engineering

Date Written: July 25, 2013

Abstract

This study quantifies four alternative macroeconomic scenarios for the southern and eastern Mediterranean countries (SEMCs), with the use of GEM-E3, a general equilibrium model. The four scenarios are: i) the continuation of current policies, ii) southern Mediterranean–EU cooperation, iii) a global opening of the southern Mediterranean countries and cooperation with the rest of the Middle East and other developing countries like China, and iv) a deterioration in the regional political climate and a failure of cooperation. Explicit assumptions on trade integration, infrastructure upgrade, population growth and governance developments are adopted in each scenario. The simulation results indicate that an infrastructure upgrade and governance improvements in the context of SEMC–EU cooperation could benefit most of the countries under consideration. The analysis remains important in light of ongoing regional developments and the need to design the best policies to pursue in the aftermath of the Arab spring.

Keywords: Arab Spring, southern and eastern Mediterranean countries, SEMC, EU, Euro-Mediterranean Area

Suggested Citation

Paroussos, Leonidas and Fragkiadakis, Kostas and Charalampidis, Ioannis and Tsani, Stella and Capros, Pantelis, Macroeconomic Scenarios for the Euro-Mediterranean Area: Quantification Based on the GEM-E3 Model (July 25, 2013). MEDPRO Report No. 7/July 2013. Available at SSRN: https://ssrn.com/abstract=2307828

Leonidas Paroussos (Contact Author)

National Technical University of Athens (NTUA) - School of Electrical and Computer Engineering ( email )

Athens
Greece

Kostas Fragkiadakis

National Technical University of Athens (NTUA) - School of Electrical and Computer Engineering ( email )

Athens
Greece

Ioannis Charalampidis

National Technical University of Athens (NTUA) - School of Electrical and Computer Engineering ( email )

Athens
Greece

Stella Tsani

Athens University of Economics and Business ( email )

Patision 76
Athens, 10443
Greece

Pantelis Capros

National Technical University of Athens (NTUA) - School of Electrical and Computer Engineering ( email )

Athens
Greece

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