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How integrated is the world economy?


Bowen, Harry P.; Munandar, Haris; Viaene, Jean-Marie


Bitte beziehen Sie sich beim Zitieren dieses Dokumentes immer auf folgenden Persistent Identifier (PID):http://nbn-resolving.de/urn:nbn:de:0168-ssoar-254569

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Abstract This paper develops a methodology to measure the degree of economic integration between nations that are members of an integrated area. We show that a fully integrated economic area (IEA) is characterized by three properties regarding the distribution of 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 IEA 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 for US states, and alternative regional trading agreements (e.g., EU countries, MERCOSUR, Bangkok Agreement, etc.) and a “world” comprising 64 countries.
Klassifikation Volkswirtschaftslehre; Wirtschaftspolitik
Methode empirisch
Freie Schlagwörter Distribution of production; Economic convergence; Factor mobility; Economic integration; E13; F15; F21; F22; O57
Sprache Dokument Englisch
Publikationsjahr 2010
Seitenangabe S. 389-414
Zeitschriftentitel Review of World Economics, 146 (2010) 3
DOI http://dx.doi.org/10.1007/s10290-010-0061-y
Status Postprint; begutachtet (peer reviewed)
Lizenz PEER Licence Agreement (applicable only to documents from PEER project)