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On the Optimality of Economic Integration

Author

Listed:
  • Nelnan Koumtingué

    (U.N. and Université de Montréal)

  • Rui Castro

    (Université de Montréal)

Abstract

We uncover conditions on the initial income and net foreign assets of potential union members such that forming a union is welfare-improving over standing alone in the world economy. Our model predicts that economic unions (i) occur relatively infrequently, and are more likely to emerge (ii) among homogeneous countries, and (iii) among rich countries.

Suggested Citation

  • Nelnan Koumtingué & Rui Castro, 2009. "On the Optimality of Economic Integration," 2009 Meeting Papers 1043, Society for Economic Dynamics.
    • Handle: RePEc:red:sed009:1043
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    References listed on IDEAS

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