 How Integrated Is The World Economy?Harry Bowen (), Haris Munandar and Jean-Marie Viaene Discussion Paper Series from McColl School of Business, Queens University of Charlotte Abstract: This paper develops a methodology to measure the degree of economic integration between nations that are members of an integrated economic area (IEA). We show that an IEA is characterized by three properties regarding the distribution of IEA member shares of total IEA output and total IEA stocks of physical and human capital. We then show that the expected distribution of member shares within a fully integrated economic area is a harmonic series, with the share distribution depending only on the number of IEA members. This property is then used to develop a composite indicator of the degree of economic integration within an IEA that indicates the distance between the theoretical and actual distribution of shares; the closer is the actual distribution to the expected distribution, the greater the degree of integration. We empirically compute our degree of integration index for US states, and alternative IEAs (e.g., EU countries, Mercosur, Bangkok Agreement, etc.) and a World comprising 64 countries. Keywords: Distribution of production; economic convergence; factor mobility; economic integration (search for similar items in EconPapers) Published in Journal of World Economics (4) 2010 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:msb:wpaper:2009-03 Access Statistics for this paper More papers in Discussion Paper Series from McColl School of Business, Queens University of Charlotte Contact information at EDIRC. |
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