Simulating the effects of the European singles market: a CGE analysis for Spain

In this paper we provide an empirical assessment of two of the measures proposed in the context of the European Single Market, namely, easing the provision of domestic and foreign services, and modifying the rules of public procurement, for the case of Spain. We build and simulate a computable general equilibrium (CGE) model, which incorporates three particular features: (i) increasing returns to scale and a noncompetitive price rule; (ii) sectoral export demand functions; and (iii) equilibrium unemployment according to a matching function approach.Financial support from the Spanish Institute for Fiscal Studies, Fundación BBVA, Gobierno de Navarra, and the Spanish Ministry of Science and Technology (through the projects SEC2002-01892 and BEC2002-00954), is gratefully acknowledged