For almost 20 years now, the European Free Trade Association (EFTA) States Iceland, Liechtenstein and Norway have been included in the EU's internal market through the Agreement on the European Economic Area (EEA). The continuing success of the EEA is threatened, however, by an ever widening gap...

In the past decade, we observed an acceleration of Western European integration, while the transition countries of Central Eastern Europe have not become members of the EU. In this paper, we conduct numerical simulations on the consequences of such a kind of differential integration within the...