Abstract:
Objectives: The purpose of this paper is to describe influences among member states of European Union. Model used in this paper 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.
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.
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.
Keywords. International trade, General Equilibrium model, EU, CR
JEL Classification Number: F17, D58, C51, F15