Assessing the Economic Impacts of Incorporating Romania's Agricultural and Food Sectors into EU's Customs Union: An Applied General Equilibrium Approach

Joining the European Union club implies, among many other policy changes, full integration of Romania's economy into EU's customs union. This is expected to have significant implications for domestic farmers and food processors. The paper constructs a single-country Applied General Equilibrium (AGE) model to investigate the impact of tariff border adjustments on changes in relative prices, production and trade patterns associated with fifteen local agro-food activities. Moreover, the modelling work identifies those agro-food sectors that have the potential to benefit the most from EU enlargement in terms of output effects given that Romanian producers are capable of fully responding to the incentives provided with integration. These mainly include (bovine) live animals and meat products, sugar, and cereal grains. Agro-food trade with EU intensifies in particular for those commodities for which trade restrictions are still substantial prior to accession. However, the magnitude of changes is relatively small due to the weak integration of domestic agro-food sectors into international trade structures. The AGE model also predicts static welfare gains of 0.65 percent of GDP equivalent variation. These seem to be more associated with better access to EU markets and increased export prices, and less with the preferential unilateral elimination of tariffs or their adjustment to EU's external levels. The model assumptions are highly theoretical and the model structure does not reflect with fidelity the workings of an economy in transition. Nonetheless, it does represent a solid base upon which further improvements could be added and structural transitional issues could be attached to more accurately predict potential outcomes.EU enlargement, Customs union, Agriculture, Romania, AGE modelling, Political Economy, D58, F15, O13,

Assessing the Economic Impacts of Incorporating Romania's Agricultural and Food Sectors into EU's Customs Union: an Applied General Equilibrium Approach

Joining the European Union club implies, among many other policy changes, full integration of Romania's economy into EU's customs union. This is expected to have significant implications for domestic farmers and food processors. The paper constructs a single-country Applied General Equilibrium (AGE) model to investigate the impact of tariff border adjustments on changes in relative prices, production and trade patterns associated with fifteen local agro-food activities. Moreover, the modelling work identifies those agro-food sectors that have the potential to benefit the most from EU enlargement in terms of output effects given that Romanian producers are capable of fully responding to the incentives provided with integration. These mainly include (bovine) live animals and meat products, sugar, and cereal grains. Agro-food trade with EU intensifies in particular for those commodities for which trade restrictions are still substantial prior to accession. However, the magnitude of changes is relatively small due to the weak integration of domestic agro-food sectors into international trade structures. The AGE model also predicts static welfare gains of 0.65 percent of GDP equivalent variation. These seem to be more associated with better access to EU markets and increased export prices, and less with the preferential unilateral elimination of tariffs or their adjustment to EU's external levels. The model assumptions are highly theoretical and the model structure does not reflect with fidelity the workings of an economy in transition. Nonetheless, it does represent a solid base upon which further improvements could be added and structural transitional issues could be attached to more accurately predict potential outcomes.EU enlargement, Customs union, Agriculture, Romania, AGE modelling

How Useful are Computable General Equilibrium Models for Sustainability Impact Assessment

Computable general equilibrium (CGE) modelling represents a powerful tool for hypothesising possible sustainability outcomes that might be triggered with the implementation of policy proposals. Nevertheless, CGE modelling is based on several tight general equilibrium and neoclassical micro-economic theoretical assumptions that make their application to the assessment of all three pillars of sustainability questionable. Although some of these assumptions have been relaxed in recent and more advanced CGE models, further research needs to be undertaken in order to bring model specifications closer to realistic behavioural relationships. CGE models also tend to focus on alternative equilibrium outcomes and rarely deal with the adjustment process or regulation measures needed to realistically bring the economy into the desired new equilibrium stance. Moreover, CGE models inherently face severe rigidities when attempting to deal with environmental and social effects. However, some authors have argued that CGE modelling may provide a suitable backbone for all three dimensions of Sustainability Impact Assessment (SIA). The paper takes a critical stand and supports the view that though CGE models may provide some useful information on individual, particularly economic, impact aspects of policy reforms, it may be inappropriate and even misleading to rely extensively on their use in SIAs.Environmental Economics and Policy,

ECONOMIC CAUSES OF TROPICAL DEFORESTATION – A GLOBAL EMPIRICAL APPLICATION

The paper investigates the complex system of causes affecting tropical deforestation at a worldwide level. There is no generally accepted theory in the deforestation literature to indicate which variables should be included in a model of deforestation at an aggregate global level. The paper begins, therefore, by presenting an analytical structure based on formal farm household economic modelling literature. The empirical findings derived from a global regression model tend to confirm the profit maximising market approach to deforestation, i.e. policy and structural variables at the macro-level that stimulate agricultural production provide farmers with incentives to deforest and expand their arable land areas. However, subsequent statistical tests suggest that the causes of tropical deforestation are difficult to identify and quantify at a global level, and that these should be analysed at a more disaggregated level.global tropical deforestation, farm household models

The Romanian Economy in Transition: Developments and Future Prospects

We address the macroeconomic developments experienced by Romania in a decade of transition towards a market driven society. We focus on a descriptive analysis with the intent of offering a clear and broad picture of the main aspects distinguishing the Romanian economy. The paper also discusses perspectives for future growth and puts forward the need to develop within the prospects of European Union integration a strategy on a more sustainable basis.transition economies, Romania, macroeconomic trends

MCA4climate: A Practical Framework for Planning Pro-Development Climate Policy

MCA4climate is a major new UNEP initiative providing 1 Introduction practical assistance to governments in preparing their climate change mitigation and adaptation plans and strategies. It aims to help governments, particularly in developing countries, identify policies and measures that are low cost, environmentally effective and consistent with national development goals. It does this by providing a structured approach to assessing and prioritizing climate-policy options, while taking into consideration associated social, economic, environmental and institutional costs and benefits. In doing so, it seeks to counter the widely held perception that tackling climate change is costly, highlight the potential developmental benefits of addressing climate change and encourage action to that end

General Equilibrium Modelling Applied to Romania (GEMAR): Focusing on the Agricultural and Food Sectors

Applied general equilibrium modelling represents a powerful tool for assessing future likely economic changes due to upcoming or hypothesised policy shocks such as those brought about by EU enlargement. It entails the main advantage of considering the complex simultaneous linkages, interactions and feedback effects between various sectors, institutions and factor resources within an economy, as well as the inter- and intra-industry trade links with other economies across the globe. This technical paper develops a general equilibrium model applied to Romania (GEMAR) with an emphasis on the agricultural and food processing activities. A simple simulation example is then given for illustrative purposes. More extensive use of GEMAR will be made in other forthcoming papers where the model will be employed to identify those economic impacts stemming from incorporating Romania's agricultural and food sectors into EU/CAP structures. The model is static with constant returns to scale and perfect competition in production. Other studies have deployed modelling techniques to deal with EU accession issues. However, the literature assessing separately the economic effects of CAP enlargement for Romania is extremely sparse. In addition, as far as the authors are aware of, there are no studies that solely focused on the likely economic effects of CAP enlargement on Romanian agricultural and food processing sectors at a disaggregated level and within a single-country general equilibrium framework. Hence, the paper should not only fill in a gap in the modelling literature dealing with EU's next phase of eastward expansion but also tackle an issue of current interest for both researchers and policy-makers involved in agriculture and economic development.Applied General Equilibrium Modelling, Romania, Agriculture, D58, O520, Research Methods/ Statistical Methods,

Measuring Environmental Action and Economic Performance in Developing Countries

Significant advances have been made in measuring the stringency of environmental policies, and understanding the relationship between environmental action and economic dynamics, particularly in high-income countries. Despite this, unequivocal empirical evidence on the impact of environmental policies on economic performance remains elusive, with conclusions being highly dependent on the conceptual and methodological choices with respect to defining and measuring the stringency of environmental policies. Most importantly, the literature evaluating these issues in developing countries remains sparse and robust findings are even more difficult to extract. This study reviews the existing body of work in both developed, and, where available, developing countries. It provides a comprehensive assessment of how environmental policy stringency has been measured, outlining definitional and conceptual challenges. It discusses the advantages and disadvantages of different indicators, and their usefulness for application in developing countries. In an effort to improve our understanding of the impact of environmental policy stringency in middleand low-income countries, the study draws lessons for the prioritization of future data collection and measurement efforts. Through the study, two types of stringency indicators emerge as requiring the most attention: de facto enforcement indicators and de jure explicit measures that capture the stringency of specific environmental laws, rules and regulations. While there is no “best” conceivable measure of the stringency of environmental policies, a multidimensional approach to quantifying stringency in developing countries, with a focus on explicit direct measures, is advocated. Data collection and indicator-improvement efforts need, though, to be updated periodically and supplemented by other proxies for environmental stringency

Enhancing the Contribution of Trade Liberalisation in Environmental Services to Sustainable Development

In the last decade, a fundamental phenomenon came to the fore in the business environment: more and more companies are offering total solutions to their customer instead of standardized products or services. Although this trend has already been studied extensively in literature, little has been said about the impact of this phenomenon on the supplier's channel management. This article develops propositions concerning the influence of a total solutions strategy on a company's channel management, rooted on an extensive literature review and case-based research in the Belgian industrial market.Total solutions, Channel management, Channel relationships, Relationship management, Environmental Economics and Policy, International Relations/Trade,

MULTIPLE REGRESSION TOOL FOR CREDIT RISK MANAGEMENT

In classical theory, the risk is limited to mathematical expectation of losses that can occur when choosing one of the possible variants. For banks, risk is represented as losses arising from the completion of one or another decision. Bank risk is a phenomenon that occurs during the activity of banking operations and that cause negative effects for those activities: deterioration of business or record bank losses affecting functionality. It can be caused by internal or external causes, generated by the competitive environment. The concept of risk can be defined as a commitment bearing the uncertainty due to the likelihood of gain or lossbanking system, credit risk, multiple regression.