This paper addresses several questions of concern to economies excluded from the world's two major trading blocs <196> the European Union (EU) and the North American Free Trade Association (NAFTA). First, is there evidence from the past that suggests the direct and indirect effects of regional...</196>

In this paper production, trade and welfare effects of European integration are discussed, with particular emphasis on the effects for the EC and EFTA. Insight from previous partial and general equilibrium analyses of the internal market are reviewed, and new model simulations are presented. In...

This paper analyses the customs union problem in a model containing a continuum of products. The continuum is in three dimensions, so that three countries each have a distinct comparative advantage. Trade patterns are endogenously determined, and changed by policy. This is in the tradition of...

Are there systematic forces such that countries of different sizes participating in a free trade bloc gain differently from the entry of new members? If economies of scale imply that firms located in large countries enjoy lower costs, then the gains from enlarging the bloc will fall...

This paper analyses tax competition between two countries of unequal size trying to attract a foreign-owned monopolist. When regional governments have only a lump-sum profit tax (subsidy) at their disposal, but face exogenous and identical transport costs for imports, then both countries will...

The ‘new’ economic geography focuses on the footloose-labour and the vertically-linked industries models. Both are complex, since they feature demand-linked and cost-linked agglomeration forces. The paper presents a simpler model, where agglomeration stems from demand-linked forces arising...

We analyze how global economic integration of factor markets affects the stability of the macroeconomy, with respect to expectations-driven fluctuations, when countries differ in their labor market institutions. It is shown that, due to the occurrence of equilibrium indeterminacy, liberalization...

Almost all the literature on tax competition in the presence of multinationals (MNCs) and profit shifting ignores trade costs. This Paper studies how economic integration, in terms of reduced trade costs and internationalization of ownership, affects tax competition and equilibrium corporate...

This paper assesses convergence in output per head across regions in the European Community (EC), for the period 1975<196>90. We use three alternative methodologies to measure convergence, which yield consistent results. We observe that there are strong differences in the pattern of convergence...</196>

This paper argues that the application of the `2% rule' to the case of Eastern Germany, which implies convergence in three decades or more, is overly pessimistic. First, it ignores discrete improvements in initial conditions related to the transition, which have been significant to date. Because...