The Link between Institutional and Economic Integration: Insights for Latin America from the European Experience

The European experience illustrates that institutional integration interacts with economic integration at the regional level. In this paper we ask how economic and institutional integration are linked and whether there is a causal link between the two. We present an original indicator of institutional integration and study how it developed vis-à-vis diverse measures of economic integration. In particular, we ask what insights can be drawn from the European process of regional integration, which started in the 1950s, for regional integration in Latin America today. We find that Latin America is currently less economically integrated not only than the European Union today, but for certain economic variables even than the European Union in the 1960s. A VAR analysis illustrates that the link between institutional and economic integration has worked both ways throughout the European experience. There is also evidence that stronger institutional integration has indeed led to deeper economic integration.     

INTEGRATING A HOUSEHOLD DEMAND SYSTEM IN THE INPUT–OUTPUT FRAMEWORK. METHODOLOGICAL ASPECTS AND MODELLING IMPLICATIONS

In this paper we argue that an accurate representation of household consumption behaviour is central to the analysis and comparison of policy interventions addressing sustainable consumption. Therefore, we propose to extend an input–output model with a specific household consumption model, at the core of which is a system of equations explaining the allocation of the households' overall expenditure across different purposes, such as buying food, the consumption of fuel for heating or electricity for cooling, education of children or travelling in terms of total expenditure and relative prices. This paper shows that the integration of a specific module for household consumption in a standard input–output model is an improvement for the analysis of the policies aimed at altering consumer behaviour.     

A SYMMETRIC INPUT–OUTPUT TABLE FOR EU27: LATEST PROGRESS

The European Commission is currently establishing an Environmentally Extended Input–Output (EE-IO) Database for the EU27 developed by the Joint Research Centre at the Institute for Prospective Technological Studies (IPTS). This project attempts to generate an analytical dataset comprising all EU countries and yearly time series for the period 1995–2005. Since, for the time being, IO and environmental accounts data are only available with significant gaps part of the dataset will require estimates based on best available proxy data and reasonable assumptions. This paper is focused on the IO database shaped around Eurostat supply and use tables and symmetric IO tables consistent with the NACE classification. The paper describes the procedure by which the latest preliminary results have been obtained for an aggregate EU27 symmetric input–output table for the year 2000.     

How can our cars become less polluting? An assessment of the environmental improvement potential of cars

This paper presents a systematic overview of the environmental impacts of new average diesel and petrol cars from a life cycle perspective. An analysis of different technical and non-technical improvement options that could be achieved at each stage of a car’s life cycle was performed. The consequences of the adoption of these options on the environment were estimated. The results show that some of the options analysed could have a major positive impact on the vehicle efficiency and induce large improvements of the environmental profile of passenger cars. The highest improvements are achievable through more efficient power trains (including hybrid car), and through lightweight cars. For some options, burden shifts from one car life cycle phase to another, or from one environmental problem to another, can occur. The results show that besides the purely technological options, those that imply behavioural changes by the driver may also reduce the environmental burden substantially.     

The Effects of the European Economic and Monetary Union (EMU) on National Fiscal Sustainability

This paper presents a methodology to analyze the responsiveness of fiscal sustainability to the endogenous fiscal discipline that will be strengthened by the EMU. This discipline arises in response to the harmonization of tax systems, the loss of control of current and prospective money financing, and the deepening of financial market-based discipline. The model developed in this paper is a generalization of Blanchard's 1984 model, in which the interest rate is determined endogenously. This provides the framework to analyze more features of the linkage between sustainability and endogenous fiscal discipline. This paper also presents a new intratemporal fiscal sustainability index.     

Testing the Links between Institutional Integration and Trade Deepening: Clues from Europe

This paper investigates the interaction between institutional integration and trade deepening in the EU over the last 50 years. It uses Granger causality tests, a VECM and variance decompositions to further the understanding of this interaction. The evidence indicates two-way endogeneity. But the link from institution building to trade dominates. Yet, this link has weakened over time, possibly due to globalisation sidestepping institutions. Moreover, the sensitivity of institutional integration to trade deepening has risen, which suggests that economic forces have gained more strength in determining institutional steps.