Implicit trade costs and European Single Market enlargement

A major current issue in the economics trade blocs is where the bloc is not just a customs union, but also incorporates substantial regulatory harmonisation or mutual recognition elements. The derivation of the costs of non-membership of such a bloc is not straightforward. In this paper, I build on the assumption that observed trade patterns can be taken to revewl trading costs, and develop a model-consistent Dixit-Stiglitz general equilibrium-based calibration technique as an alternative to gravity methods previously used....