2018
DOI: 10.2139/ssrn.3160818
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The Cost of Non-Europe, Revisited

Abstract: We estimate the trade-related welfare gains from the European Union. Strong estimated trade effect of the EU-rising over time-based on structural gravity. The Single Market increases bilateral trade more than three times as much as a "normal" RTA. The costs of Non-Europe (weighted by country size) are estimated to vary between 3% and 7% on average for the EU depending on the counterfactual ("normal" RTA vs return to WTO rules notably). Wide variation across member countries: small open economies in Europe gain… Show more

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Cited by 56 publications
(67 citation statements)
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References 38 publications
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“…For instance, Oberhofer and Pfaffermayr () use a new quantitative trade model to estimate the negative welfare effects of Brexit; under a soft Brexit, welfare falls about 1.5% after 6 years, but under a hard Brexit by 3.5%. Mayer et al () estimate the potential costs of non‐Europe. In a model comparable to ours (without intermediates), the average European economy's welfare loss is 1.5%; with intermediates, the loss is 4.4%.…”
Section: Discussionmentioning
confidence: 99%
See 1 more Smart Citation
“…For instance, Oberhofer and Pfaffermayr () use a new quantitative trade model to estimate the negative welfare effects of Brexit; under a soft Brexit, welfare falls about 1.5% after 6 years, but under a hard Brexit by 3.5%. Mayer et al () estimate the potential costs of non‐Europe. In a model comparable to ours (without intermediates), the average European economy's welfare loss is 1.5%; with intermediates, the loss is 4.4%.…”
Section: Discussionmentioning
confidence: 99%
“…However, we note the relevance of this approach, used recently in similar timely EIA events. For instance, Brakman, Garretsen, and Kohl () and Oberhofer and Pfaffermayr () used the same methodology to evaluate the potential trade and welfare effects of the UK leaving the EU (Brexit) and Mayer, Vicard, and Zignago () recently used this methodology to evaluate the potential trade and welfare effects of a possible dissolution of the EU.…”
Section: Methodology and Literature Reviewmentioning
confidence: 99%
“…The CEPII produced similar estimates (Vicard, 2017;Mayer et al, 2018). The authors first evaluate the impact of Brexit on UK trade, then the impact of lower trade on GDP.…”
Section: The Impact On the Eu27mentioning
confidence: 94%
“…In "gravity plus CGE" models, the impact is always large on trade but relatively small on GDP. For instance, in Mayer et al (2018), the single market membership doubles trade in goods between MS, but increases their GDP by 4.4% only (and by 2.3% for the UK). Felbermayr et al (2018b) use a model with a multi-sector inputoutput analysis and a precise evaluation of the impact of EU membership for the UK.…”
Section: The Impact On the Eu27mentioning
confidence: 99%
“…There have been many studies of the trade effects of Brexit, using the gravity model. Examples include Dhingra et al (2017), Sampson (2017), Brakman, Garretsen, and Kohl (2018), and Mayer, Vicard, and Zignago (2019). There are also many other important aspects of Brexit on which economists have already written, and no doubt there will be many more.…”
mentioning
confidence: 99%