Abstract:

Objectives: The purpose of this paper is to describe influences among member states of European Union. The paper contains two models. The first one describes microeconomic relationships in the economy of Czech Republic (with accented influence of the EU on the economy of this member state) and it is possible to use it for simulation of the future behavior of its economy after the accession to the EU. The purpose of the second model is to model international trade among all European Union member states and verify statistically the impact of main economic variables on it.

Data/Methods: For the first microeconomic model, we used general equilibrium model as a theoretical frame. The parameters of the model were calibrated using the data from the year 2003 (mainly from the input-output table). The resultant model was used for simulation of the consequences of the main changes expected with regard to the accession to the EU. The second macroeconomic model is based on gravity equation. For the specification and estimation of the model, we have used panel data. The time series were for EU25 member states and the period 1997-2005.

Expected results: The development of the economy in CR before and after the accession to EU can be successfully modeled by applying general equilibrium model, but the main problem is that elasticity of substitution between domestic and foreign trade must be given or estimated properly. It is difficult with regard to the range of available data. The second model should confirm statistically important relationship among the variables of international trade.

Keywords. International trade, General Equilibrium model, Gravity model, Panel data, EU, CR

JEL Classification Number: F17, D58, C51, F13, F15