The Gains from Economic Integration

David Comerford, Jose V. Rodriguez Mora

Research output: Working paperDiscussion paper

6 Citations (Scopus)

Abstract

This paper measures the effect of political integration, such as sharing a national state or economic union, on the degree of trade integration. Consistently with previous work, we find large border effects. However, such estimates may be biased and overestimate the effects of borders because of endogeneity: selection into sharing a political space is correlated with affinities for trade. We propose a method to address this and to estimate a causal effect. We then conduct speculative exercises showing the costs and benefits of the changing levels of integration associated with: the independence of Scotland, Catalonia and the Basque Country from the UK and Spain (but remaining within the European Union); the UK’s exit from the EU; the break-up of the EU itself; and the achievement of frictions between members of the EU similar to those expected between regions of a single country. We find that the border effect between countries is an order of magnitude larger than the border effect associated with the European Union.
LanguageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-57
Number of pages59
Volume17
Publication statusPublished - 21 Nov 2017

Fingerprint

economic integration
EU
economic union
political integration
national state
Basque
Border effect
Economic integration
Spain
European Union
costs

Keywords

  • border effect
  • trade
  • independence

Cite this

Comerford, D., & Rodriguez Mora, J. V. (2017). The Gains from Economic Integration. (15 ed.) (pp. 1-57). Glasgow: University of Strathclyde.
Comerford, David ; Rodriguez Mora, Jose V. / The Gains from Economic Integration. 15. ed. Glasgow : University of Strathclyde, 2017. pp. 1-57
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Comerford, D & Rodriguez Mora, JV 2017 'The Gains from Economic Integration' 15 edn, University of Strathclyde, Glasgow, pp. 1-57.

The Gains from Economic Integration. / Comerford, David; Rodriguez Mora, Jose V.

15. ed. Glasgow : University of Strathclyde, 2017. p. 1-57.

Research output: Working paperDiscussion paper

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Comerford D, Rodriguez Mora JV. The Gains from Economic Integration. 15 ed. Glasgow: University of Strathclyde. 2017 Nov 21, p. 1-57.