Models and Mechanisms of Economic Integration

By a model of economic integration we will mean the exposition of the main supporting elements of the integration system, which are stable over time, to the exclusion of secondary, changing details. Integration models are therefore not photographs of existing reality, but simplified images of it, allowing us to understand the logic of that reality. Model analysis of economic integration is useful both for theoreticians studying this phenomenon and for practitioners involved in the daily shaping of integration policy. By formulating mathematical or graphical models of integration, theorists create the possibility of assessing the logical consistency of fragments or overall mental constructs on economic integration created in the past and created now. The model approach furthermore allows integration models to be created as models for economic policy. In practice, the model approach can, above all, provide an answer to the question of whether the transmission of the construct of an integration grouping (e.g. free trade area, customs union, common market, etc.) from one setting to another will yield the expected results. This applies in particular to attempts to transplant various forms of economic integration from economically developed countries to underdeveloped countries. No less important is a model analysis for countries newly joining integration groupings.