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European Integration at the Crossroads: A Review Essay on the 50th Anniversary of Bela Balassa's Theory of Economic Integration

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  • Andr� Sapir

Abstract

Bela Balassa's Theory of Economic Integration, published fifty years ago, is a remarkable, yet little known book. This essay reviews developments in the economic literature and in the process of European integration since the book's publication, showing that it was incredibly prescient. It anticipated by more than twenty years the modern literature on economic integration that emphasizes scale economies, imperfect competition, and economic geography. It also predicted that monetary union cannot function properly without political unification, a condition well illustrated by the recent euro-debt crisis that is likely to be a watershed in the history of European integration. (JEL B31, F15, F36, G01)

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Article provided by American Economic Association in its journal Journal of Economic Literature.

Volume (Year): 49 (2011)
Issue (Month): 4 (December)
Pages: 1200-1229

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Handle: RePEc:aea:jeclit:v:49:y:2011:i:4:p:1200-1229

Note: DOI: 10.1257/jel.49.4.1200
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Cited by:
  1. Andrea Bonilla Bolanos, 2012. "External vulnerabilities and economic integration. Is the Union of South American Nations a promising project?," Working Papers 1238, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
  2. Neumann, Dirk & Bargain, Olivier & Dolls, Mathias & Fuest, Clemens & Peichl, Andreas, 2012. "Fiscal Union in Europe? Efficiency, Equity and Stabilizing Effects of an EU-Wide Income Tax," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 66063, Verein für Socialpolitik / German Economic Association.
  3. Keuschnigg, Christian, 2012. "Should Europe Become a Fiscal Union?," Economics Working Paper Series 1205, University of St. Gallen, School of Economics and Political Science.
  4. Campos, Nauro F & Coricelli, Fabrizio & Moretti, Luigi, 2014. "Economic Growth and Political Integration: Estimating the Benefits from Membership in the European Union Using the Synthetic Counterfactuals Method," IZA Discussion Papers 8162, Institute for the Study of Labor (IZA).
  5. Andrea Bonilla, 2014. "External vulnerabilities and economic integration. Is the Union of South American Nations a promising project ?," Working Papers halshs-00945044, HAL.

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