Types and Economic Effects of Economic Integration
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Economic integration has been increasing over the decades. There are two types of economic integration which are defined by 1) locations such as regional trade agreement and sub-regional economic zone; and 2) cooperation levels such as preferential trade arrangements, free trade area, closer economic partnership, custom union, common market, economic union and political union. Economic integration affects to member countries mainly through two different points. The static effects which affect to production efficiency and consumer welfare are trade creation, trade diversion, chance of employment and effect of free movement of factors. The dynamic effects which affect to economic growth are internal economy, external economy and high competition of market.
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