Economic interdependence among the EEC countries: An unconventional view

Economic theory suggests that increasing trade between integrating countries involves similar changes of key variables such as the main targets and instruments of economic policy. Empirical models built at various universities and research institutes show that economic fluctuations are almost not transmitted between countries.In this paper, the authors show that increased interdependence does not necessarily induce stronger transmission of economic fluctuations. This conclusion is drawn from both theory and actual data.