How Does Economic Development in Eastern Europe Affect Austria's Regions? A Multiregional General Equilibrium Framework

29 Pages Posted: 15 Nov 2002

See all articles by Johannes Bröcker

Johannes Bröcker

Dresden University of Technology - Faculty of Economics and Business Management

Martin Schneider

Independent

Abstract

The paper quantifies regional welfare effects arising from the increasing trade flows between Austria and its Eastern neighbors after the opening up of Eastern Europe. We calibrate a static multiregional Computable General Equilibrium (CGE) model with benchmark data from 1994 for Austria, subdivided into nine Federal Provinces. The regions are linked by trade flows with the four Eastern neighboring countries and with the rest of the world. We simulate the effects of the increase of trade interpenetration as observed between 1989 and 1999 in a comparative static analysis. Regional welfare effects under fixed and flexible wages are presented. We also compare national CGE results with estimates obtained in a simple partial equilibrium approach.

Suggested Citation

Bröcker, Johannes and Schneider, Martin, How Does Economic Development in Eastern Europe Affect Austria's Regions? A Multiregional General Equilibrium Framework. Journal of Regional Science, Vol. 42, pp. 257-285, 2002. Available at SSRN: https://ssrn.com/abstract=313502

Johannes Bröcker (Contact Author)

Dresden University of Technology - Faculty of Economics and Business Management ( email )

Mommsenstrasse 13
Dresden, D-01062
Germany

Martin Schneider

Independent ( email )

No Address Available
United States

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