Factor Mobility, Agriculture, Environment and Quantitative Studies
Edited by Miroslav N. Jovanović
Nigel Grimwade, David G. Mayes and Jiao Wang 1 INTRODUCTION In the early phases of post-war regional integration there were many estimates of the economic impact in both prospect and retrospect. On the whole they came up with rather small numbers, less than 1 per cent of GDP (Lipsey, 1960; Mayes, 1978; Winters, 1987). This seems in contradiction to the political enthusiasm for those changes. More recently the European Commission (Cecchini et al., 1988; Emerson et al., 1988) came up with considerably more significant numbers for the possible impact of the completion of the European single market (5–7 per cent of GDP). However, these estimates subsequently proved controversial and it is noticeable that the Commission was much more reticent about publishing estimates of the likely gain from Economic and Monetary Union (EMU) or subsequent enlargements. There are many problems in estimating the effects of regional integration on the economic welfare and main variables of interest for the countries involved and the world as a whole. Regional integration has a variety of effects, some of which improve welfare, others which reduce it. The effects depend on the period of time considered. While the early stages of integration were mainly concerned with tariff liberalisation, they now go much further, tackling non-tariff barriers and services as well as goods. Some arrangements also incorporate measures for promoting intra-regional investment and even labour mobility. A few have also included measures for stabilising intraregional exchange rates or the adoption of a common currency. In most...
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