Long-Run Effects of the Common Agricultural Policy for Switzerland: A Simulation Analysis

The long run impact of adopting the Common Agricultural Policy for Switzerland is analyzed on the basis of a three-region applied general equilibrium model. Estimates suggest that, because of the present high protection of agriculture, integration generates important net welfare gains (about 1 % of Swiss GDP) in spite of the small size of the agricultural sector. Taking into account adjustment costs due to temporary unemployment still produces sizeable welfare gains. Estimates of the distributive impacts are also provided along with an analysis of the robustness of results.