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European Integration and Production in the French Economy

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  • Lila J. Truett
  • Dale B. Truett

Abstract

Effects of greater European integration on the French economy are explored with an aggregate cost function. Input direct price elasticities are inelastic, but greatest (absolute value) for capital and lowest for imports. Cross‐price elasticities suggest inputs are substitutes and are higher for domestic inputs than domestic input and imports pairs. As trade restrictions fall, effects on domestic input demand may increase as substitution elasticities rise. Inverse output supply price elasticities indicate domestic input prices are relatively important factors affecting consumption goods prices and import prices more important for investment goods. Thus, import price decreases may stimulate investment and growth. (JEL F14, O10, O12)

Suggested Citation

  • Lila J. Truett & Dale B. Truett, 2005. "European Integration and Production in the French Economy," Contemporary Economic Policy, Western Economic Association International, vol. 23(2), pages 304-316, April.
    • Handle: RePEc:bla:coecpo:v:23:y:2005:i:2:p:304-316
    DOI: 10.1093/cep/byi023
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    References listed on IDEAS

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    Cited by:

    1. Lila J. Truett & Dale B. Truett, 2009. "Challenges For France In The Emerging International Environment: A Dynamic Analysis," Contemporary Economic Policy, Western Economic Association International, vol. 27(4), pages 566-573, October.
    2. Lila J. Truett & Dale B. Truett, 2023. "The impacts of imports and trade liberalization in Brazil: Insights from an aggregate cost function," Review of Development Economics, Wiley Blackwell, vol. 27(2), pages 1013-1033, May.

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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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