The dynamics of economic integration: theory and policy

Lucas Bretschger and Thomas Steger

No 04/32, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: Integration a.ects economic growth mainly through two different channels : The scale-effect channel and the factor-reallocation channel. In order to investigate both channels within a unifying framework, we employ a simple descriptive growth model. The scale-effect channel increases either the long-run growth rate or the level of the balanced growth path. The factor-reallocation channel is ambiguous. It is shown under which conditions this mechanism induces either a rise or a fall in the long-run growth rate. In addition, a number of policy conclusions are drawn.

Keywords: trade; economic integration; economic growth; scale e.ects; factor reallocation (search for similar items in EconPapers)
JEL-codes: F1 O4 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2004-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Journal Article: The dynamics of economic integration: Theory and policy (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:eth:wpswif:04-32

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