engleski

Static and Dynamic Effects of Trade Integration in Southeast European Countries

The paper focuses on expected static and dynamic effects of the trade integration in the Southeast Europe. We assume that static effects will not be important ; lower trade costs could moderately increase intra-regional trade, mostly for the benefit of the more advanced countries, but the opposite effect - trade diversion - is also likely to occur. Dynamic effects are likely to be more significant. First, economies of scale in public sector will enable every country of the region to gain due to the lower costs of public goods such are infrastructure and energy. Second important dynamic effect is related to increase in outside FDI inflows, especially in countries with macroeconomic stability and progress in transition, while the intra-regional FDIs will probably decrease because so far they have been mostly horizontal or "tariff jumping".

Effects of Integration; SEE Countries; Intra-regional Trade

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