Welfare effects of TTIP in a DSGE model

Arbeitspapier

Several studies have analyzed the trade and output effects of the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union, but our paper is the first attempt to study its welfare effects. We measure the welfare effect of TTIP as the percentage of initial consumption that households would be willing to pay for TTIP in order to remain as well off with TTIP as without it. The discounted present value of the welfare gain of TTIP, which leads to the elimination of tariffs and cuts in non-tariff measures by 25%, is in the range of 1% to 4% of initial consumption, depending on the parameterization. The welfare gain increases in the elasticity of substitution between domestic and foreign goods. The bulk of the welfare gain is caused by cuts in non-tariff measures.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionsbeiträge ; No. 2016/17

Classification and Topics

• Classification: Wirtschaft ; Trade Policy; International Trade Organizations ; Open Economy Macroeconomics ; Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
• Subject: tariffs ; TTIP ; trade agreement ; trade liberalization

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Engler, Philipp ; Tervala, Juha
• Event: Veröffentlichung
• (who): Freie Universität Berlin, Fachbereich Wirtschaftswissenschaft
• (where): Berlin
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/145466
• Last update: 10.03.2025, 11:44 AM CET