Energy market liberalisation in the FSU

This work looks at implications of energy market liberalisation in the countries of the former Soviet Union (FSU). Our study will be based upon a computable general equilibrium (CGE) model called the Worldwide Trade Analysis Project (GTAP). This specialised model can help you evaluate effects in an over-all equilibrium set-up. Energy market reforms are broadly discussed in the literature, but the utilization of CGE models has been minimal…

In the primary paper, we perform two experiments. The very first is a benchmark liberalisation experiment by which all government taxes and subsidies are eliminated. The second reason is an effort to simulate a rise in the export capacity of energy commodities to the European markets. Generally, we discover that liberalisation of FSU energy markets would likely boost welfare in the EU countries, whilst in the FSU welfare would decrease. This outcome is due mainly to the terms of trade effect, as export prices of FSU countries decrease….

Energy market liberalisation in the FSU downloads

Source: Bank of Finland, Institute for Economies in Transition