Discussion paper

DP12844 The Cost of Non-Europe, Revisited

In this paper we quantify the ``Cost of Non-Europe'', i.e. the trade-related welfare
gains each country member has reaped from the European Union. Thirty years
after the terminology of Non-Europe was used to give estimates of the gains from
further integration, we use modern versions of the gravity model to estimate the
trade creation implied by the EU, and apply those to counterfactual exercises where
for instance the EU returns to a ``normal'', shallow-type regional agreement,
or reverts to WTO rules. Those scenarios are envisioned
with or without the exit of the United Kingdom from the EU (Brexit)
happening, which points to interesting cross-country
differences and potential cascade effects in doing and undoing of
trade agreements.


Mayer, T, V Vicard and S Zignago (2018), ‘DP12844 The Cost of Non-Europe, Revisited‘, CEPR Discussion Paper No. 12844. CEPR Press, Paris & London. https://cepr.org/publications/dp12844