This chapter discusses whether and how .new quantitative trade models.(NQTMs) can be fruitfully applied to quantify the welfare effects of trade liberalization, thus shedding light on the trade-related effects of further European integration. On the one hand, it argues that NQTMs have indeed the potential of being used to supplement traditional ‘computable general equilibrium’ (CGE) analysis thanks to their tight connection between theory and data, appealing micro-theoretical foundations, and enhanced attention to the estimation of structural parameters. On the other hand, further work is still needed in order to fully exploit such potential.

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Gianmarco I. P. Ottaviano

23 September 2014     Paper Number CEPDP1301

Download PDF - European integration and the gains from trade

This CEP discussion paper is published under the centre's Trade programme.

This publication comes under the following theme: Brexit