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A bayesian estimation of the economic effects of the Common Fisheries Policy on the Galician Fleet: a dynamic stochastic general equilibrium approach

Colla-De-Robertis, Esteban and Da-Rocha, Jose-Maria and García-Cutrin, Javier and Gutiérrez, María-José and Prellezo, Raul (2018): A bayesian estimation of the economic effects of the Common Fisheries Policy on the Galician Fleet: a dynamic stochastic general equilibrium approach. Forthcoming in: Ocean and Coastal Management , Vol. 167, No. January (4 October 2018): pp. 137-144.

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Abstract

What would have happened if a relatively looser fisheries policy had been implemented in the European Union (EU)? Using Bayesian methods a Dynamic Stochastic General Equilib- rium (DSGE) model is estimated to assess the impact of the European Common Fisheries Policy (CFP) on the economic performance of a Galician (north-west of Spain) fleet highly dependant on the EU southern stock of hake. Our counterfactual analysis shows that if a less effective CFP had been implemented during the period 1986-2012, ‘fishing opportunities” would have increased, leading to an increase in labor hours of 4.87%. However, this increase in fishing activity would have worsened the profitability of the fleet, dropping wages and rental price of capital by 6.79% and 0.88%, respectively. Welfare would also be negatively affected since, in addition to the increase in hours worked, consumption would have reduced by 0.59%.

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