Market Integration, Regionalism and the Global Economy

The collection of papers in this volume are drawn from the final conference of CEPR’s programme of research on ‘Market Integration, Regionalism, and the Global Economy’ (MIRAGE). The objective of this research was to use new techniques of economic analysis to study changes in the global economy in relationship to the process of regional integration, and to draw out the policy implications of such changes. Chapters in the volume are organized in two parts. The first part covers three international trade policy issues: the relationship between regional integration agreements and multilateral trading (Winters and Bagwell-Staiger); the political economy of trade policy (Helpman); and the interaction between trade, labour markets and income inequality (Rodrik and Wood). The second part moves away from the analysis of regional intregration in the global context to issues arising within regional groupings: core-periphery differences (Bayoumi-Eichengreen and Venables); labour mobility (Faini); and income convergence (Bertola and Quah). The volume offers important analytical and policy insights in changes in the global economy taking place in connection with the process of regional integration. The principle message is that in a world characterized by trade distortions and non-linearities, regional integration may or may not foster global integration, and may or may not advance regional or global convergence. The key is good economic policy based on sound economic analysis.