erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

The Welfare and Trade Effects of Turkeys' Customs Union Agreement on Turkish Economy: A CGE analysis with Imperfect Competition and Economies of Scale

Ethem Karakaya (Adnan Menderes University)

Abstract

Turkey had a Customs Union Agreement with the EU countries in 1995. It is expected that this agreement will have substantial effect on the Turkish economy. In order to analyse these possible effect we employed a CGE model, which takes imperfect competition and economies of scale into account. The model used in this paper is a 21 industry, six of them perfectly competitive and forteen imperfectly competitive, CGE calibrated to a 1990 data. For the imperfectly competitive sectors we both considered Cournot ant Bertrand behaviour. Our preliminiray results indicate that Turkish welfare increases substantially when imperfect competition is introduced.

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