Market Integration, Regionalism and the Global Economy

Demonstrates how new techniques of economic analysis can be used to study the process of regional integration.

A study of the nature and the policy implication of changes in the global economy in relationship to the process of regional integration, conducted using the newest techniques of economic analysis. The principal message drawn from these analytical and policy insights is that in a world characterised by trade distortions and nonlinearities, regional integration may or may not foster global integration, and may or may not advance regional or global convergence. The key is good economic policy based on sound economic analysis. Part one of the volume covers three international trade policy issues: regionalism and multilateralism; the political economy of trade policy; and trade income inequality. Part two (chapters 7-11) focuses on three 'domestic' problems faced by regional groups: labour migration; exchange rate arrangements; and real convergence.

1. Introduction Richard Baldwin, Daniel Cohen, Andre Sapir and Anthony Venables; Part I. Regionalism and the Global Economy L. Alan Winters: 2. Discussion Andre Sapir; 3. Preferential agreements and the multilateral trading system Kyle Bagwell and Robert W. Staiger; Discussion Raquel Fernandez; 4. Politics and trade policy Elhanan Helpman; Discussion Thierry Verdier; 5. Globalisation and labour, or if globalisation is a bowl of cherries, why are there so many glum faces around the table Dani Rodrik; Discussion Alasdair Smith; 6. Openness and wage inequality in developing countries: the Lation American challenge to East Asian conventional wisdom; Discussion Riccardo Faini; Part II. Market Integration and Regionalism: 7. Operationalising the theory of optimum currency areas Tamim Bayoumi and Barry Eichengreen; Discussion Jean Pisani-Ferry; 8. European Migrants: an endangered species? Riccardo Faini; Discussion Richard Baldwin; 9. Geography and specialisation: industrial belts on a circular plain Anthony J. Venables; Discussion Alisdair Smith; 10. Convergence ... an overview Giuseppe Bertola; Discussion Daniel Cohen; 11. Convergence as distribution dynamics (with or without growth) Danny T. Quah; Discussion Lucrezia Reichlin.

In a world of trade distortions and nonlinearities, regional integration may not always foster global integration and convergence. The key is good economic policy based on sound analysis. Using new techniques of economic analysis, this volume studies the process of regional integration and reaches some important analytical and political conclusions.