Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73265
Authors: 
Kohler, Wilhelm
Keuschnigg, Christian
Year of Publication: 
2000
Series/Report no.: 
Working Paper, Department of Economics, Johannes Kepler University of Linz 0026
Abstract: 
In part I of this paper, we have presented a general treatment of the welfare effect of an eastern EU enlargement on incumbent countries. Part II now takes a closer look at the Austrian case. We first present a few descriptive statistics on the role that east-west trade, as well as the pertinent trade barriers, play for the Austrian economy. We then argue that a numerical simulation, based on a suitably specified general equilibrium model, is an appropriate way towards a full evaluation of the welfare and distributional consequences of enlargement. Focusing on the Austrian case, we therefore implement an enriched and parameterized version of the general model used in part I of the paper. The model features savings and investment, based on intertemporal optimization, as well as sectoral allocation of capital and labor (skilled/unskilled), based on product differentiation and imperfect competition. In addition, the model incorporates a detailed representation of the government budget, featuring distortive taces and subsidies, as well as transfers to domestic households, and financial transactions with the EU. The model allows us to take a quantitative view on both the costs and integrations gains of en eastern enlargement. Relying on a Hicksian welfare measure which incorporates both long-run effects and short-run adjustment, our numerical simulations indicate that, in the Austrian case, the integration gains outweigh the fiscal burden.
JEL: 
F02
F13
F15
Document Type: 
Working Paper

Files in This Item:
File
Size
595.99 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.