Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2015-08-11
Number: 15-096/VI
Author-Name: Irena Mikolajun
Author-Workplace-Name: Erasmus University Rotterdam, the Netherlands
Author-Name: Jean-Marie Viaene
Author-Workplace-Name: Erasmus University Rotterdam, the Netherlands
Title: Trade, Factor Mobility and the Extent of Economic Integration: Theory and Evidence
Abstract: The Middle East was once seen as a medieval great globalized force. Nowadays it shows one of the lowest intra-regional trade in the world and therefore it is claimed that the region is poorly integrated. Yet, with the steady flow of workers across national borders of the Middle East is this conjecture correct? To answer this question the paper develops an integration benchmark which consists of the steady state production equilibrium characterized by free trade and perfect factor mobility. We apply metrics to measure the distance between this benchmark and the data and compare three different regions of the world (EU, Latin America and Middle East). We find that, despite large differences in trade patterns, measures of economic integration in 2009 are remarkably close across regions. For example, we calculate that economic integration in the Middle East is just 2.4% below that of the European Union.
Classification-JEL: E13, F4, F15, F21, O11, O53, O54
Keywords: Economic integration, Euclidean distance, factor shares, international migration
File-Url: https://papers.tinbergen.nl/15096.pdf
File-Format: application/pdf
File-Size: 362512 bytes
Handle: RePEc:tin:wpaper:20150096