Outsiders in economic integration: The case of a transition economy

Manzocchi, Stefano and Ottaviano, Gianmarco I.P. (1999) Outsiders in economic integration: The case of a transition economy. [Working Paper]. p. 25. EUI Working Papers in Economics (NO. 99/32).

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Official URL: http://cadmus.eui.eu/bitstream/handle/1814/717/ECO...

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Abstract/Index

We use a spatial model of endogenous growth to investigate the likely impact of discriminatory integration among two advanced countries on their own welfare as well as on the welfare of an outsiders transition economy. On the one side, since per capita income convergence depends on relative market access and local market size, piece-wise integration causes insider-outsider divergence. This phenomenon is exacerbated by slow transition. On the other side, simultaneous exclusion from the integration process and ongoing transition have unpredictable effects on the structural adjustment, which might even exhibit swinging behaviour. Since in practice such swings imply large adjustment costs, careful integration design is required. Under this respect, the asymmetric phasing out of trade barriers built in the Europe Agreements works in the right direction.


Item Type:Report / Paper (Working Paper)
Research documents and activity classification:Working Papers > Refereed Working Papers / of international relevance
Divisions:Department of Economics and Finance > LLEE (Luiss Lab of European Economics)
Additional Information:The paper has been published in "Economics of Transition", Vol. 9 (1), Pages 229-249, March 2001.
Uncontrolled Keywords:Trade and Monetary Integration; Economic Geography; Transition Economies.
MIUR Scientific Area:Area 13 - Economics and Statistics > SECS-P/01 Political Economy
Deposited By:Maria Teresa Nistico
Deposited On:09 Dec 2010 10:37
Last Modified:09 Dec 2010 10:53

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