1. Review of Economic Integration ManEc 358 Brother Bryson

2. Europe has been rather spectacularly successful in its integration efforts. Many others have been far less successful. What makes for success? Europe has been rather spectacularly successful in its integration efforts. Many others have been far less successful. What makes for success?

3. Consider again the prices that play a role in a customs union integration scheme: Consider again the prices that play a role in a customs union integration scheme: P world P part count P tariff P domestic

4. In your groups, discuss the proximities of given price lines in the set and elasticities of supply and demand that will make integration successful. In your groups, discuss the proximities of given price lines in the set and elasticities of supply and demand that will make integration successful. P world P prt cntrs P tariff P domestic

5. The relative sizes of these gains depend on: 1. elasticities, the “flatness” of the curves. Imports First, check elasticities Ptar Ppcs

6. Where they are relatively elastic (flat), the imports will be greater and gains go with more extensive trade. Imports First, check elasticities

7. Gains are greatest when the difference is  small between partner and world.  great between partner countries and us. c c Ptar Ppcs Pw

8. Large gains here. Large imports at near world prices (far better than our prices) P world P part count P tariff P domestic

9. Small gains here. Small imports at prices near ours and way above world prices. P world P part count P tariff P domestic