Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/148559 
Year of Publication: 
2016
Series/Report no.: 
DIW Discussion Papers No. 1625
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
Several studies have analyzed the trade and output effects of the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union, but our paper is the first attempt to study its welfare effects. We measure the welfare effect of TTIP as the percentage of initial consumption that households would be willing to pay for TTIP in order to remain as well off with TTIP as without it. The discounted present value of the welfare gain of TTIP, which leads to the elimination of tariffs and cuts in non-tariff measures by 25%, is in the range of 1% to 4% of initial consumption, depending on the parameterization. The welfare gain increases in the elasticity of substitution between domestic and foreign goods. The bulk of the welfare gain is caused by cuts in non-tariff measures.
Subjects: 
tariffs
TTIP
trade agreement
trade liberalization
JEL: 
F13
F41
E60
Document Type: 
Working Paper

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