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EEC integration towards 1992: some distributional aspects

Author: Neven, Damien J. INSEAD Area: Economics and Political ScienceIn: Economic Policy, vol. 5, no. 10, April 1990 Language: EnglishDescription: p. 13-62.Type of document: INSEAD ArticleNote: Please ask the Library for this articleAbstract: This paper tries to assess the distribution of the potential gains arising from integration across the various members of the European Economic Community. First, the pattern of inter-industry trade between European countries and the underlying comparative advantages is characterised. Substantial inter-industry trade is found to occur between Portugal and Greece on the one hand and the Northern European countries on the other hand. Such trade occurs especially in footwerar, clothing and electrical machinery. As expected the Southern European countries are found to have a comparative advantage in labour intensive commodities. Germany and Ireland seem to have an advantage in human capital intensive industries, while Italy tends to specialize in capital intensive production. A limited calibration exercise suggests that the output of footwear and clothing in Portugal and Greece could increase by as much as 15%, as a result of the internal market programme
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This paper tries to assess the distribution of the potential gains arising from integration across the various members of the European Economic Community. First, the pattern of inter-industry trade between European countries and the underlying comparative advantages is characterised. Substantial inter-industry trade is found to occur between Portugal and Greece on the one hand and the Northern European countries on the other hand. Such trade occurs especially in footwerar, clothing and electrical machinery. As expected the Southern European countries are found to have a comparative advantage in labour intensive commodities. Germany and Ireland seem to have an advantage in human capital intensive industries, while Italy tends to specialize in capital intensive production. A limited calibration exercise suggests that the output of footwear and clothing in Portugal and Greece could increase by as much as 15%, as a result of the internal market programme

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