The best example of complete economic integration is with the European Union (EU) European Union (EU) The European Union (EU) is a unified international organization that governs the economic, political, and social policies of 27 member. . The EU is made up of separate member countries, including: Germany. France.
Economic integration is beneficial in many ways, as it allows countries to specialize and trade without government interference, which can benefit all economies. It results in a reduction of costs and ultimately an increase in overall wealth.
It allows for specializations of economies with comparative advantages and can trade with other economies that possess alternative comparative advantages.
Economic integration is expected to improve the outcomes for all economies by many economists and policymakers. Within economics, there are seven stages that lead to complete economic integration: Many countries move in and out of the above stages with other partner countries.
Economic integration involves agreements between countries that usually include the elimination of trade barriers. Trade Barriers Trade barriers are legal measures put into place primarily to protect a nation's home economy. They typically reduce the quantity of goods and services that can be imported. Such trade barriers take the form of tariffs ...
In order to appeal to nationalists, some countries employ forms of protectionism, which leads to higher tariffs and less free trade between other countries. The notable feature of economic integration is the loss of individual central banks who control monetary policy.
Trade costs are reduced, and goods and services are more widely available, which leads to a more efficient economy. An efficient economy distributes capital, goods, and services into the areas that demand them the most. The movement of employees is liberalized under economic integration as well.