Economie (dis)integration in the presence of evolutionary learning

Cem Karayalcin, Diego Méndez-Carbajo, Devashish Mitra

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

We use a two-factor, two-sector model to study the effects of economic integration and its reversal in the presence of input-generated external economies in one of the sectors. The equilibrium selection problem that arises is solved by applying a simple trial-and-error learning rule. Economic integration can take individual economies ridden with coordination failures to better equilibria, i.e., can solve the coordination problem. We show that integration (and disintegration) may generate cycles in wages, rentals and the sectoral allocation of factors.

Original languageEnglish (US)
Pages (from-to)463-481
Number of pages19
JournalJournal of Evolutionary Economics
Volume14
Issue number4
DOIs
StatePublished - Oct 1 2004

Keywords

  • Coordination failures
  • Economic (dis)integration
  • Input-generated externalities
  • Learning rule
  • Simulation

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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