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A theory of economic unions

Gino Gancia (), Giacomo Ponzetto () and Jaume Ventura

Journal of Monetary Economics, 2020, vol. 109, issue C, 107-127

Abstract: After decades of successful growth, economic unions have recently become the focus of heightened political controversy. To understand why, we develop a theoretical model of the effects on trade, income distribution and welfare of economic unions that differ in size and scope. Our model shows that political support for international unions can grow with their breadth and depth provided member countries are sufficiently similar. However, differences in economic size and factor endowments can trigger disagreement over the value of unions. Our model is consistent with some salient features of the process of European integration and statistical evidence from survey data.

Keywords: Economic unions; Non-tariff barriers; European integration (search for similar items in EconPapers)
JEL-codes: F15 F55 F62 H77 D71 (search for similar items in EconPapers)
Date: 2020
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Working Paper: A Theory of Economic Unions (2019) Downloads
Working Paper: A Theory of Economic Unions (2019) Downloads
Working Paper: A Theory of Economic Unions (2019) Downloads
Working Paper: A theory of economic unions (2019) Downloads
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DOI: 10.1016/j.jmoneco.2019.11.007

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