2.1 The Trade Approach


Academic Research paper and Study of the Economy of Romania and Romanian Business

Most benefits of regional integration can be derived from the theory of international trade,[1] though it has to be stressed that in the case of the EU political goals and considerations al­ways play an additional role.

The trade approach to regional integration applies in a first instance standard classic and neoclassical models to integration phenomena, in particular:

  • Comparative advantages
  • and specialization approaches , in particular the Heckscher-Ohlin model

More recent contributions from trade theory added to the trade approach the following issues:

  • Market size considerations
  • Economies of scale
  • Allocational optimization

Footsnotes

[1] The following sketch of theories is far from being unique. Any manual on international trade in general, re­gional integration or the economics of the EU in particular will feature an excellent insight into the topic. There­fore, references are given only in some cases. Nonetheless, two manuals shall be highlighted: Markusen et al. (1995) not only for being comprehensive but for being as much intuitive as formal and El-Agraa (2004) for an extensive overview of the European economies (including the CEECs) and a large range of foreign economies for ben­chmarking purposes.