Economic theories of enlargement and those of more general aspects of European integration have at times developed in parallel, with spill overs occurring in both directions. In other cases they have taken rather diverging routes. The term ‘economic theories of integration’ can be used to classify a wide and variegated body of literature. As European integration has evolved from the early years centred mainly on trade and agriculture, to the single market, and economic and monetary union, so too have the economic theories attempting to explain the process. Early economic analysis of integration was based mainly on the so-called ‘static concepts’ of trade creation and trade diversion, and empirical studies dealt with both the establishment of the Community and the enlargement process. These early estimates of static effects found the impact of integration to be surprisingly small, so subsequently at the time of the 1992 Single Market Programme there was more emphasis on dynamic effects such as growth, economies of scale etc. However, estimation of these dynamic effects has always proved problematic. With the prospect of Eastern enlargement, one of the first questions to attract economic analysis was what should be the ‘normal’ level of trade, i.e. trade between European Community and Central-Eastern Europe had the division of Europe not occurred. A favoured tool of economists at the time was the gravity model. This type of approach subsequently experienced a boom in the general integration literature following its adoption by Andrew Rose and others, who achieved surprising results illustrating how far exchange rate stability could foster trade. Another prominent theory in the economics of enlargement was the theory of clubs, attempting to illustrate how costs and benefits vary as the number of members of a ‘club’ such as the EU changes. This kind of approach has a parallel in the Optimal Currency Area (OCA) literature aimed at assessing which member states should join economic and monetary union. While neither theory was sufficiently operational to be of much use at the time when initial choices were made about participants in Eastern enlargement and the euro, subsequently there have been huge developments in the OCA literature. In contrast the application of the theory of clubs to EU enlargement has remained largely embryonic. Perhaps this reflects the fact while that choices in both areas contain a strong political element, this is probably far more the case for enlargement. Much of the literature on both integration and enlargement deals with attempts to assess the impact of individual policies such as the Common Agricultural Policy or Economic and Social Cohesion. Here the interaction has been two-way: existing models were used to assess the impact of enlargement for such policies, while the exigencies of applying these policies in the new member states forced the development of these and other models. Also in this case theories of enlargement furthered understanding of the overall integration process.

Senior, S.M. (2013). EU Enlargement and Theories of Economic Integration. In Mapping European Economic Integration (pp. 168-188). Basingstoke : PALGRAVE MACMILLAN.

EU Enlargement and Theories of Economic Integration

SENIOR, SUSAN MARY
2013-01-01

Abstract

Economic theories of enlargement and those of more general aspects of European integration have at times developed in parallel, with spill overs occurring in both directions. In other cases they have taken rather diverging routes. The term ‘economic theories of integration’ can be used to classify a wide and variegated body of literature. As European integration has evolved from the early years centred mainly on trade and agriculture, to the single market, and economic and monetary union, so too have the economic theories attempting to explain the process. Early economic analysis of integration was based mainly on the so-called ‘static concepts’ of trade creation and trade diversion, and empirical studies dealt with both the establishment of the Community and the enlargement process. These early estimates of static effects found the impact of integration to be surprisingly small, so subsequently at the time of the 1992 Single Market Programme there was more emphasis on dynamic effects such as growth, economies of scale etc. However, estimation of these dynamic effects has always proved problematic. With the prospect of Eastern enlargement, one of the first questions to attract economic analysis was what should be the ‘normal’ level of trade, i.e. trade between European Community and Central-Eastern Europe had the division of Europe not occurred. A favoured tool of economists at the time was the gravity model. This type of approach subsequently experienced a boom in the general integration literature following its adoption by Andrew Rose and others, who achieved surprising results illustrating how far exchange rate stability could foster trade. Another prominent theory in the economics of enlargement was the theory of clubs, attempting to illustrate how costs and benefits vary as the number of members of a ‘club’ such as the EU changes. This kind of approach has a parallel in the Optimal Currency Area (OCA) literature aimed at assessing which member states should join economic and monetary union. While neither theory was sufficiently operational to be of much use at the time when initial choices were made about participants in Eastern enlargement and the euro, subsequently there have been huge developments in the OCA literature. In contrast the application of the theory of clubs to EU enlargement has remained largely embryonic. Perhaps this reflects the fact while that choices in both areas contain a strong political element, this is probably far more the case for enlargement. Much of the literature on both integration and enlargement deals with attempts to assess the impact of individual policies such as the Common Agricultural Policy or Economic and Social Cohesion. Here the interaction has been two-way: existing models were used to assess the impact of enlargement for such policies, while the exigencies of applying these policies in the new member states forced the development of these and other models. Also in this case theories of enlargement furthered understanding of the overall integration process.
2013
9780230356153
Senior, S.M. (2013). EU Enlargement and Theories of Economic Integration. In Mapping European Economic Integration (pp. 168-188). Basingstoke : PALGRAVE MACMILLAN.
File in questo prodotto:
File Dimensione Formato  
Mapping integration.pdf

non disponibili

Tipologia: Post-print
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 889.34 kB
Formato Adobe PDF
889.34 kB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11365/48170
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo