Chapter 2 Borders and Integration

Abstract

National borders are a hurdle to the expansion of the open economy. Integration today remains imperfect because national borders translate into trading costs, including differences in monetary regimes. Political borders shelter many goods and services from external competition and, consequently, represent a critical exogenous force in the integration process. Small economies face thicker borders than large economies. Regional trade arrangements have softened or, in some cases, pushed outward national borders, but in the process new borders have emerged. Borders affect also finance and monies. While the speed of financial integration suggests currency consolidation and a decline in the ratio of independent monies to sovereign nations, the formation of multilateral monetary unions (MUs) pushes the ratio toward unity.

Citation

Fratianni, M. (2006), "Chapter 2 Borders and Integration", Fratianni, M. (Ed.) Regional Economic Integration (Research in Global Strategic Management, Vol. 12), Emerald Group Publishing Limited, Leeds, pp. 11-38. https://doi.org/10.1016/S1064-4857(06)12002-1