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The dynamics of economic integration : theory and policy

Integration a.ects economic growth mainly through two different channels : The scale-effect channel and the factor-reallocation channel. In order to investigate both channels within a unifying framework, we employ a simple descriptive growth model. The scale-effect channel increases either the long-run growth rate or the level of the balanced growth path. The factor-reallocation channel is ambiguous. It is shown under which conditions this mechanism induces either a rise or a fall in the long-run growth rate. In addition, a number of policy conclusions are drawn.

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File URL: http://www.cer.ethz.ch/research/wp_04_32.pdf
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Paper provided by CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich in its series CER-ETH Economics working paper series with number 04/32.

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Length: 23 pages
Date of creation: Apr 2004
Date of revision:
Handle: RePEc:eth:wpswif:04-32
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