The Costs of the EU Integration for Switzerland: Alternative Scenarios

Abstract

This paper is based on a more comprehensive study by Vaterlaus, Himmel, Koellreuter and Simmons (1999) ¹ which was commissioned by the Secretariat for Economic Affairs (SECO) in an attempt to evaluate the economic effects of a Swiss entry into the European Union (EU) from the year 2002. Given the ex-ante nature of the study, our analysis using a macro-model framework relies heavily on introducing various shocks in an exogenous manner, and using our judgement in a pragmatic way in forming assumptions, where the nature of the current model is inadequate to address certain issues. Although our approach can be criticised for containing some ad-hoc elements, various sensitivity tests reveal that the main conclusions of the study are not challenged a great deal by different formulation of the shocks in question.