European Integration and the Gains from Trade

Ottaviano, Gianmarco I.P.

European Integration and the Gains from Trade

Chapter prepared for the Handbook of the Economics of European Integration, edited by Harald Badinger and Volker Nitsch, Routledge. 2014

CFS Working Paper, No. 470

21 Pages Posted: 8 Oct 2014

See all articles by Gianmarco I.P. Ottaviano

Gianmarco I.P. Ottaviano

Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation

Date Written: September 2014

Abstract

This chapter discusses whether and how "new quantitative trade models" (NQTMs) can be fruitfully applied to quantify the welfare effects of trade liberalization, thus shedding light on the trade-related effects of further European integration. On the one hand, it argues that NQTMs have indeed the potential of being used to supplement traditional "computable general equilibrium" (CGE) analysis thanks to their tight connection between theory and data, appealing micro-theoretical foundations, and enhanced attention to the estimation of structural parameters. On the other hand, further work is still needed in order to fully exploit such potential.

Keywords: Gains from trade, European integration, Quantitative trade models, Gravity equations, Structural estimation

JEL Classification: F10, F15, F17

Suggested Citation: Suggested Citation

Ottaviano, Gianmarco I.P., European Integration and the Gains from Trade (September 2014). Chapter prepared for the Handbook of the Economics of European Integration, edited by Harald Badinger and Volker Nitsch, Routledge. 2014, CFS Working Paper, No. 470, Available at SSRN: https://ssrn.com/abstract=2505957