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Models of Economic Integration and Localized Growth


  • Bertola, Giuseppe


Economic integration and free factor mobility may be expected to enhance the growth performance of a united Europe. Simple models of integration among independent, endogenously-growing economic entities suggest that factor mobility may deepen rather than reduce regional differences in economic performance, however. This paper studies interactions between static geographical externalities and dynamic investment decisions, and it finds that economic integration need not result in more efficient factor allocations or faster growth.

Suggested Citation

  • Bertola, Giuseppe, 1992. "Models of Economic Integration and Localized Growth," CEPR Discussion Papers 651, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:651

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    References listed on IDEAS

    1. Feenstra, R.C. & Rose, A.K., 1992. "Trade with Mexico and Water Use in California Agriculture," Papers 399, California Davis - Institute of Governmental Affairs.
    2. Paul Krugman, 1982. "Trade in Differentiated Products and the Political Economy of Trade Liberalization," NBER Chapters,in: Import Competition and Response, pages 197-222 National Bureau of Economic Research, Inc.
    3. Aaron Tornell, 1991. "Time Inconsistency of Protectionist Programs," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 963-974.
    4. Peter A. Diamond, 1982. "Protection, Trade Adjustment Assistance, and Income Distribution," NBER Chapters,in: Import Competition and Response, pages 123-150 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Basevi, Giorgio & Ottaviano, Gianmarco, 2001. "The District and the Global Economy: Exporting versus Foreign Location," CEPR Discussion Papers 2976, C.E.P.R. Discussion Papers.
    2. Philippe Martin & Gianmarco Ottaviano, 1995. "The Geography of Multi-Speed Europe," Working Papers 1995-10, CEPII research center.
    3. Mª Luz García de la Vega & José A. Herce, "undated". "Integration and Growth in the EU. The Role of Trade," Working Papers 2000-20, FEDEA.
    4. Luisa Corrado & Ron Martin & Melvyn Weeks, 2004. "Identifying And Interpreting Convergence Clusters Across Europe," Royal Economic Society Annual Conference 2004 145, Royal Economic Society.
    5. Asli Demirgüç-Kunt & Ross Levine, 2009. "Finance and Inequality: Theory and Evidence," Annual Review of Financial Economics, Annual Reviews, vol. 1(1), pages 287-318, November.
    6. Pozzolo, Alberto Franco, 2004. "Endogenous Growth in Open Economies - A Survey of Major Results," Economics & Statistics Discussion Papers esdp04020, University of Molise, Dept. EGSeI.
    7. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
    8. Larramona, Gemma & Sanso, Marcos, 2006. "Migration dynamics, growth and convergence," Journal of Economic Dynamics and Control, Elsevier, vol. 30(11), pages 2261-2279, November.
    9. Giannetti, Mariassunta, 2003. "On the mechanics of migration decisions: skill complementarities and endogenous price differentials," Journal of Development Economics, Elsevier, vol. 71(2), pages 329-349, August.
    10. Faini, Riccardo, 1996. "Increasing returns, migrations and convergence," Journal of Development Economics, Elsevier, vol. 49(1), pages 121-136, April.
    11. Geremia Palomba, 2008. "Capital income taxation and economic growth in open economies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(6), pages 668-692, December.
    12. Ron Martin & Peter Tyler, 2000. "Regional Employment Evolutions in the European Union: A Preliminary Analysis," Regional Studies, Taylor & Francis Journals, vol. 34(7), pages 601-616, October.
    13. Walz, Uwe, 1993. "On the growth (rate) effects of migration," Tübinger Diskussionsbeiträge 24, University of Tübingen, School of Business and Economics.

    More about this item


    European Community; Externalities; Factor Mobility; Growth;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations


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