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Defining North American Economic Integration

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Author Info
Robertson, Raymond
Abstract

Understanding the idea of economic integration may be straightforward, but measuring it is not. The academic literature has identified a wide range of measures that capture various aspects of integration. Of these, the four most frequently used measures are product-level prices, factor markets, trade volumes, and product availability. All four are valuable measures that effectively capture different aspects of economic integration. The differences between the measures suggest that some might be more useful in certain contexts than in others. A comparison between the different measures suggests that the last two might generate the most meaningful insights into North American economic integration because conditions in Mexico, a developing country, are quite different than in Canada and the United States. To motivate the different measures of economic integration, the next section of the paper briefly discusses why economic integration is important. As defined above, economic integration is clearly important for growth, which ultimately determines each country’s standard of living. Integration also drives change, which often is difficult and is therefore resisted. These changes directly affect producers and consumers, and therefore it is important to be able to identify the results of measures designed to foster economic integration, like trade agreements. The sections that follow therefore discuss each different measure of integration and what they tell us about integration in North America.

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Paper provided by Farm Foundation in its series North American Agrifood Integration: Situation and Perspectives, May 2004, Cancun, Mexico with number 16732.

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Date of creation: 2004
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Handle: RePEc:ags:ffnaai:16732

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Keywords: Industrial Organization;

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  1. Beghin, John C. & Fang, Cheng, 2002. "Protection and Trade Liberalization under Incomplete Market Integration," Staff General Research Papers 5018, Iowa State University, Department of Economics.
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  2. David Weinstein & Christian Broda, 2004. "Globalization and the Gains from Variety," Econometric Society 2004 North American Summer Meetings 508, Econometric Society. [Downloadable!]
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  3. Alan M. Taylor, 2000. "Potential Pitfalls for the Purchasing-Power-Parity Puzzle? Sampling and Specification Biases in Mean-Reversion Tests of the Law of One Price," NBER Working Papers 7577, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2002. "Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development," NBER Working Papers 9305, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Parsley, David & Wei, Shang-Jin, 2001. "Limiting Currency Volatility to Stimulate Goods Market Integration: a Price-Based Approach," CEPR Discussion Papers 2958, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  6. Ben-David, Dan, 1993. "Equalizing Exchange: Trade Liberalization and Income Convergence," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 653-79, August. [Downloadable!] (restricted)
  7. Domberger, Simon, 1987. "Relative Price Variability and Inflation: A Disaggregated Analysis," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 547-66, June. [Downloadable!] (restricted)
  8. Courchene, Thomas J., 2003. "FTA at 15, NAFTA at 10: a Canadian perspective on North American integration," The North American Journal of Economics and Finance, Elsevier, vol. 14(2), pages 263-285, August. [Downloadable!] (restricted)
  9. Jakab, Zoltan M. & Kovacs, Mihaly A. & Oszlay, Andras, 2001. "How Far Has Trade Integration Advanced?: An Analysis of the Actual and Potential Trade of Three Central and Eastern European Countries," Journal of Comparative Economics, Elsevier, vol. 29(2), pages 276-292, June. [Downloadable!] (restricted)
  10. Roberto Alvarez & Raymond Robertson, 2004. "Exposure to foreign markets and plant-level innovation: evidence from Chile and Mexico," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 13(1), pages 57-87, March. [Downloadable!] (restricted)
  11. Gordon H. Hanson & Raymond Robertson & Antonio Spilimbergo, 2002. "Does Border Enforcement Protect U.S. Workers From Illegal Immigration?," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 73-92, February. [Downloadable!] (restricted)
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  12. Robertson, Raymond, 2003. "Exchange rates and relative wages: evidence from Mexico," The North American Journal of Economics and Finance, Elsevier, vol. 14(1), pages 25-48, March. [Downloadable!] (restricted)
  13. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May. [Downloadable!] (restricted)
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  14. Jeffrey A. Frankel & David Romer, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June. [Downloadable!] (restricted)
  15. Raymond Robertson, 2000. "Wage Shocks and North American Labor-Market Integration," American Economic Review, American Economic Association, vol. 90(4), pages 742-764, September. [Downloadable!] (restricted)
  16. Berkowitz, Daniel & DeJong, David N., 2003. "Regional integration: an empirical assessment of Russia," Journal of Urban Economics, Elsevier, vol. 53(3), pages 541-559, May. [Downloadable!] (restricted)
  17. Aaron Tornell & Frank Westermann & Lorenza Martinez, 2004. "NAFTA and Mexico's Less-Than-Stellar Performance," NBER Working Papers 10289, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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