Working Papers
Bridging Different Modelling Tools For Studying The Case Of Belarusian European Integration
This paper examines the potential macroeconomic consequences of Belarusian European integration, a complex transformation that would unfold through several stages. The process is likely to begin with a significant external shock associated with the removal of implicit energy subsidies and the restructuring of external economic relations, followed by a transition period of macroeconomic adjustment and sectoral reallocation. Only after these adjustments can the economy reach a new post-integration steady state and enter a phase of long-term convergence-driven growth. To analyze these phenomena, the study adopts a multi-model analytical framework combining several modelling tools, including CGE, QPM, DSGE, debt sustainability analysis, and LTGM.
The outputs of some models serve as inputs for others, allowing the construction of a consistent macroeconomic narrative of Belarus’s potential integration path. The simulations suggest that the post-integration steady state of the Belarusian economy would likely be moderately weaker than the current one, with potential GDP declining by approximately 2.7–3.9 percent depending on the availability of external support. However, none of the simulated scenarios produces an uncontrolled collapse of output despite the magnitude of the energy price shock. The transition period appears significant but manageable, although its trajectory will depend strongly on policy responses and institutional conditions. Long-term simulations indicate that, while an inertial development path would lead to relative economic impoverishment, European integration fundamentally alters the trajectory toward gradual convergence with more advanced economies. The ultimate outcomes depend critically on the activation of productivity growth mechanisms and the effectiveness of economic and institutional policies during the transition period.
This research was co-funded by the European Union. Its contents are the sole responsibility of the authors and do not necessarily reflect the views of the European Union