Economic Integration process

Aims of the course

In-depth study of the theory and practice of (regional) economic integrations and various methods of measuring its effects to understand the causes and effects of economic integration processes in the global context.

Course syllabus

1. Characteristics and dynamics of (regional) economic integration processes
− new regionalism and global value chains, the future of regionalism
− Different forms of regional trade agreements (RTAs) and the role of rules of origin
− A case of European RTAs

2. Multilateralism vs. regionalism
− WTO principles, WTO and RTAs
− Optimal number of trade blocks
− Regionalism as a “Building Block” or “Stumbling Block” of a multilateral trading system

3. Trade effects of economic integration in theory and empirics
− theory of customs union
− Static analysis of trade effects with and without vertical integration of production
− Measuring the trade effects of regional trade agreements

4. Dynamic effects of economic integration
− Interaction of competition, market size and economies of scale effects
− Firm heterogeneity and the process of industry restructuring
− How important are the dynamic effects in practice?

5. Regional economic integrations and location of production
− 'Spatial blindness' in economic models
− Location of economic activity: centripetal and centrifugal forces
− Urban Mathematics and the Zipf Rule
− New economic geography, economic integration and location of production
− Convergence
− Empirics: an example of regional disparity in the EU

6. Gravity model and empirical assessment of trade effects
− Gravity model specification
− Data preparation and variable definition
− Econometric problems in estimating the gravity model
− Methods of estimation
− Interpretation of results

7. Comparative analysis of the existing regional trade agreements

Course director(s)