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Fragmentation versus Unity of the World Economy


  • Pavel Neumann


The article deals with fragmentation and unity prospects of the world economy with respect to the role of its main centres (Europe/EU, East Asia, America). From the view point of the process of the running multilateral liberalisation the world economy was formed as relatively unified at first after World War II. However, regionalisation intensified in 1990s and since then stronger fragmentation has become a natural element of the world economy globalization as "new regionalism". Theoretically, the fragmentation process can be explained by Viner's customs union theory as well as later by the regionalism domino theory developed by many authors. Concerning the role of individual centres, despite its present differentiation, Europe (EU), is more unified than the other regions. However, with its deep integration concept and trade diversion stemming from a high intratrade rate, Europe contributes rather to the world fragmentation. East Asia represented by ASEAN keeps still sticking to the shallow integration, co-operating with non-member partners. The group represents best the open regionalism characteristics, currently not strengthening the world economy fragmentation. The American area remains still relatively fragmented despite the U.S. effort to create a wide integration zone similar to NAFTA. The American region appears more open than Europe with respect to the intratrade share, nevertheless, its integration structure is still in progress; and its impact on the solution of the world economy fragmentation-unity dilemma is uncertain.

Suggested Citation

  • Pavel Neumann, 2008. "Fragmentation versus Unity of the World Economy," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2008(2), pages 70-89.
  • Handle: RePEc:prg:jnlaop:v:2008:y:2008:i:2:id:58:p:70-89

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    References listed on IDEAS

    1. Burfisher, Mary E. & Robinson, Sherman & Thierfelder, Karen, 2004. "Regionalism," MTID discussion papers 65, International Food Policy Research Institute (IFPRI).
    2. Baldwin, Richard, 1993. "A Domino Theory of Regionalism," CEPR Discussion Papers 857, C.E.P.R. Discussion Papers.
    3. Yongzheng Yang & Alvin Hilaire, 2003. "The United States and the New Regionalism/ Bilateralism," IMF Working Papers 03/206, International Monetary Fund.
    4. Xinshen Diao & Eugenio Díaz-Bonilla & Sherman Robinson, 2003. "Scenarios for Trade Integration in the Americas," Economie Internationale, CEPII research center, issue 94-95, pages 33-51.
    5. Sapir, Andre, 2001. "Domino effects in Western European regional trade, 1960-1992," European Journal of Political Economy, Elsevier, vol. 17(2), pages 377-388, June.
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    More about this item


    multilateralism; regionalism; world economy; fragmentation; unity; regional trade agreements; intratrade;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General


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