Paper #1665

Título:

A theory of economic unions

Autores:

Gino Gancia, Giacomo A. M. Ponzetto y Jaume Ventura

Data:

Agosto 2019

Resumen:

After decades of successful growth, economic unions have recently become the focus of heightened political controversy. We argue that this is partly due to the growth of trade between countries that are increasingly dissimilar. We develop a theoretical framework to study the e§ects on trade, income distribution and welfare of economic unions that di§er in size and scope. Our model shows that political support for international unions can grow with their breadth and depth as long as member countries are su¢ ciently similar. However, di§erences in economic size and factor endowments can trigger disagreement over the value of unions between and within countries. The model is consistent with some salient features of the process of European integration and statistical evidence from survey data.

Palabras clave:

Economic unions, non-tariff barriers, European intergation

Códigos JEL:

F15, F55, F62, H77, D71, D78

Área de investigación:

Macroeconomía y Economía Internacional

Publicado en:

Journal of Monetary Economics, 109, 2020, 107-127.

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