Economic integration is the unification of economic policies between different states, through the partial or full abolition of tariff and non-tariff restrictions on trade.
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10 Facts About Economic integration
2.
Trade-stimulation effects intended by means of economic integration are part of the contemporary economic Theory of the Second Best: where, in theory, the best option is free trade, with free competition and no trade barriers whatsoever.
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3.
Free trade is treated as an idealistic option, and although realized within certain developed states, economic integration has been thought of as the "second best" option for global trade where barriers to full free trade exist.
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4.
Economic integration is meant in turn to lead to lower prices for distributors and consumers with the goal of increasing the level of welfare, while leading to an increase of economic productivity of the states.
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5.
Besides these economic reasons, the primary reasons why economic integration has been pursued in practise are largely political.
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6.
The European Economic integration Community was created to integrate France and Germany's economies to the point that they would find it impossible to go to war with each other.
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7.
Framework of the theory of economic integration was laid out by Jacob Viner who defined the trade creation and trade diversion effects, the terms introduced for the change of interregional flow of goods caused by changes in customs tariffs due to the creation of an economic union.
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8.
Economic integration considered trade flows between two states prior and after their unification, and compared them with the rest of the world.
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9.
Economic integration's findings became and still are the foundation of the theory of economic integration.
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10.
In economics the word integration was first employed in industrial organisation to refer to combinations of business firms through economic agreements, cartels, concerns, trusts, and mergers—horizontal integration referring to combinations of competitors, vertical integration to combinations of suppliers with customers.
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