Quantifying Four Scenarios for Europe

This study presents four economic scenarios for Europe until 2040. The scenarios are developed around two key uncertainties: international cooperation and institutional reforms. In the scenarios Strong Europe (SE) and Global Economy (GE), international cooperation is prominent, while the other scenarios, Regional Communities (RC) and Transatlantic Market (TM), feature limited international cooperation. Public institutions are important in Strong Europe and Regional Communities. In Global Economy and Transatlantic Market the role of the public sector is limited. There is more room for private initiatives in these scenarios. To illustrate the scenarios, this document presents quantitative developments described with an applied general equilibrium model developed at CPB: WorldScan. By using this model we are able to derive consistency between developments in the scenarios and to apply common economic mechanisms. The variation in the outcomes for the scenarios is derived by introducing differences in exogenous trends. This document explains and motivates these differences