Models of Economic Integration and Localized Growth

Giuseppe Bertola

No 651, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Economic integration and free factor mobility may be expected to enhance the growth performance of a united Europe. Simple models of integration among independent, endogenously-growing economic entities suggest that factor mobility may deepen rather than reduce regional differences in economic performance, however. This paper studies interactions between static geographical externalities and dynamic investment decisions, and it finds that economic integration need not result in more efficient factor allocations or faster growth.

Keywords: European Community; Externalities; Factor Mobility; Growth (search for similar items in EconPapers)
JEL-codes: O11 O19 (search for similar items in EconPapers)
Date: 1992-03
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Citations: View citations in EconPapers (13)

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