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A global Baltic: potential gains from trade liberalisation in the Baltic Sea states
Örebro University, Swedish Business School at Örebro University.ORCID iD: 0000-0003-0149-9598
2008 (English)Conference paper, Oral presentation only (Refereed)
Abstract [en]

What would a “Global Baltic”, liberalised to the rest of the world, mean for national income and trade patterns of the Baltic Sea region? Although the countries have displayed substantial economic growth and trading activity over the last decade, facilitated by politico-economic reforms, significant trade barriers still exist. Their removal might further boost the economies of the region. The aim of this study is to analyse the potential effects from unilateral trade liberalisation, using a CGE-model with monopolistic competition. Besides addressing the “usual suspects” (tariffs, subsidies and services barriers) and trade facilitation in the main simulation, we also address some non-tariff-measures (NTM) in a separate simulation. The NTM-simulation is based on recently released data. The effect of a “Global Baltic” would be a substantial boost to national income and trade of the region: a 1 and 0.9 percent increase in regional income, in the main and the NTM-scenario, respectively. Particularly strong results are found for the group of emerging economies. The largest income gains stem from a country’s own liberalisation. With respect to the different simulation elements, trade facilitation and reductions in NTMs bring the major sources of gains. In the main as well as the NTM scenario, income effects are primarily due to elimination of dead-weight losses caused by rules and regulations at, or behind the border and more efficient allocation of resources. The income effects from scale economies are slightly negative in both scenarios on an aggregate level. On a country level, the results show that different reforms create different incentives for production, and that the net-effect on a country’s national income will to a large extent be related to which sectors are expanding/contracting. Structurally, the expected joint effect of the two simulation scenarios is a move towards services and industrial production and export.

Place, publisher, year, edition, pages
2008.
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:oru:diva-20562OAI: oai:DiVA.org:oru-20562DiVA, id: diva2:464410
Conference
11th Annual Conference on Global Economic Analysis, Future of global economy, Helsinki, Finland, June 12-14, 2008
Available from: 2011-12-13 Created: 2011-12-13 Last updated: 2017-10-17Bibliographically approved

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https://www.gtap.agecon.purdue.edu/resources/download/3685.pdf

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Lodefalk, Magnus

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf