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Turkish EU Membership: A Simulation Study on Economic Effects

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  • Sulamaa, Pekka
  • Widgrén, Mika

Abstract

This paper evaluates the economic effects of Turkish EU membership. The evaluation is based on the widely utilized computable general equilibrium called model GTAP (Global Trade Analysis Project). Imperfect competition is modelled by existence of scale economies on non agricultural sectors. The latest GTAP database version (base year 2001) is aggregated into seven regions: Turkey, Germany-Austria, North EU, South EU, Balkan countries, NAFTA, ASIA and Rest of World. We analyse economic effects of abolishing trade barriers between the EU25 and Turkey and applying common external tax on Turkey. Turkish EU membership is clearly beneficial for Turkey and it does not seem to have significant negative impact for the rest of the world. If we take scale economies into account the aggregate effects are larger than in perfect competition case.

Suggested Citation

  • Sulamaa, Pekka & Widgrén, Mika, 2007. "Turkish EU Membership: A Simulation Study on Economic Effects," Discussion Papers 410, VATT Institute for Economic Research.
    • Handle: RePEc:fer:dpaper:410
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    File URL: https://www.doria.fi/handle/10024/148393
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    References listed on IDEAS

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    1. Bernard M. Hoekman & Togan Sübidey, 2005. "Turkey : Economic Reform and Accession to the European Union," World Bank Publications - Books, The World Bank Group, number 7494.
    2. Francois, Joseph F., 1998. "Scale Economies And Imperfect Competition In The Gtap Model," Technical Papers 28718, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Howe, Howard & Pollak, Robert A & Wales, Terence J, 1979. "Theory and Time Series Estimation of the Quadratic Expenditure System," Econometrica, Econometric Society, vol. 47(5), pages 1231-1247, September.
    4. Glenn W. Harrison & Thomas F. Rutherford & David G. Tarr, 2014. "Economic implications for Turkey of a Customs Union with the European Union," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 16, pages 395-404, World Scientific Publishing Co. Pte. Ltd..
    5. Hanoch, Giora, 1975. "Production and Demand Models with Direct or Indirect Implicit Additivity," Econometrica, Econometric Society, vol. 43(3), pages 395-419, May.
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    Cited by:

    1. Cakmak, Erol H. & Dudu, Hasan, 2013. "Trade Liberalization and Productivity Growth: A Recursive Dynamic CGE Analysis for Turkey," 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152358, International Agricultural Trade Research Consortium.
    2. Erol H. Cakmak & Hasan Dudu, 2014. "Economic Growth in the Euro-Med Area through Trade Integration: Focus on Agriculture and Food The case of Turkey," JRC Research Reports JRC84201, Joint Research Centre.
    3. Hasan, Dudu & Erol, Cakmak, 2014. "Climate Change, Agriculture And Trade Liberalization: A Dynamic Cge Analysis For Turkey," 2014 Third Congress, June 25-27, 2014, Alghero, Italy 172964, Italian Association of Agricultural and Applied Economics (AIEAA).
    4. Karaca, Orhan & Philippidis, George, 2008. "Turkey’S Accession To The European Union: Implications For Agricultural Sectors," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6398, European Association of Agricultural Economists.

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    More about this item

    Keywords

    Turkey; EU; CGE; international trade; Economic growth; Taloudellinen kasvu; Taxation; Verotus; Policy analysis and modelling; Päätöksenteon tuki ja mallintaminen;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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