• M. Rashid Business Administration Discipline, Khulna University, Khulna-9208, Bangladesh.
  • M. M. Rahman Business Administration Discipline, School of Business, Khulna University, Khulna 9208, Bangladesh



International adjustments; Policy coordination; Economic integration, Convergence; Competition


The process of ‘globalisation’ now a days leading to a greater interdependence among nations than ever before. And thus greater cross-border spillovers imply an increased need for international policy coordination. The internationalisation of assets and goods market together with the advances in transportation and information technologies, has guaranteed that what happens in one country, especially in a large country, will be felt by other countries. The upsurge in economic integration, in recent times, in the shape of free trade areas, customs union, common markets and various types of preferential association have clearly showed the widespread belief on the value of economic integration. Those interactions are chosen as a way of economic growth, export-led for example, even though they might have some conflicting features. The integration of not less than twelve currencies into a single one in Europe is one of the most amazing facts in the history of modem economics. This paper is primarily based on secondary sources. Extensive literature review has been conducted to frame the concept and issues. Despite the consensus on the benefits of micro and macroeconomic policy coordination, economic blocs still face many difficulties in doing it. Those difficulties arise from countries' varied and usually opposing views and principles about micro and macroeconomic policy. It is undoubtedly difficult to ensure the benefits for all the stakeholders while going for economic growth through opening the economy with all sides. The need for macroeconomic policy co-ordination is obviously a must in an integrated area to realize the full benefits of integration. It must be admitted however, that coordination is a difficult task for countries to do, considering their immense differences. With the increasing number of them forming regional arrangements, one cannot help asking of what path would this cooperation be heading towards-basically a question of success or failure.


Download data is not yet available.


Alesina, A. and Tabellini, G., 1987. Rules and discretion with non-coordinated monetary and fiscal policies. Economic Inquiry, 25: 619-630.

Ali, M., 2001. The European Union economics and policies. Organisation forEconomic Cooperation and Development, Paris, France.

Armstrong, H. and Taylor, J., 2000. Regional economic policy. In: The Economics of European Union, Oxford University Press, New York, USA.

Arte, M. J. and Lee, N., 1994. The economics of European Union (eds.), Oxford University Press, New York, USA.

Baldwin, R., Cohen, D., Sapir, A. and Venables, A. J., 1999. Market integration, regionalism and the global economy. Centre for Economic Policy Research, London, UK.

Barro, R. J. and Sala-I-Martin, X., 1991. Convergence across states and regions. Brookings Papers on Economic Activity,1: 107-182.

Barro, R. J. and Sala-I-Martin, X., 1992a. Convergence. Journal of Political Economy, 100(2).

Barro, R. J. and Sala-I-Martin, X., 1992b. Regional growth and migration: A Japan-United States Comparison. Journal of the Japanese and International Economics, 6, December.

Barro, R. J. and Sala-I-Martin, X., 1998. Economic Growth. McGraw-Hill Advanced Series in Economics, USA.

Bean, C. R., 1992. Economic and Monetary Union in Europe. Journal of Economic Perspectives,6: 31-52.

Beetsma, R. and Bovenberg, A. L., 1995. The interaction of fiscal and monetary policy in a monetary union: Balancing credibility and flexibility. University of Limburg and CEPR Working Paper, The Netherlands.

Beetsma, R., Debrun, X. and Klassen, F., 2001. Is fiscal coordination in EMU desirable? IMF Working Paper, WP: 01(178), IMF Research Department.

Ben-David, D., 1994. Converging clubs and diverging economies. CEPR Discussion Paper Series,922.

Ben-David, D., 1995. Trade and convergence among countries. CEPR Discussion Paper Series, 1126.

Blommenstein, H. J., 1991. The reality of international economic policy coordination (eds.).Organisation for Economic Cooperation and Development, Paris.

Buiter, W.H. and Kletzer, K. M., 1990. Reflections on the fiscal implications of a common currency. Yale University, Connecticut, USA.

Cable, V. and Henderson, D., 1994. Trade Blocs: The future of regional integration. Royal Institute of International Affairs, Sweden.

Carbaugh, R. J., 2000. International Economics. International Thomson Publishing House, 7th Edition, Cincinatti, Ohio, USA.

Cooper, R. N., 1994. Environmental and resources policies for the world economy. Integrating National Economies: Promises and Pitfall Series, Brookings Institution, Washington D. C., USA.

Debelle, G., 1993. Central Bank Independence: A Free Lunch? mimeo, MIT.

Debelle, G. and Fischer, S., 1994. How independent should a Central Bank be? CEPR Publication. 392.

Delors, R., 1989. Report on economic and monetary union in the European Community. Commission of the European Communities, Brussels.

European Commission. 1996. First report on economic and social cohesion. Office for Official Publications of the European Communities, Luxemburg.

Fujita, M. and Thisse, J.F., 1996. Economics of agglomeration. Journal of the Japanese and International Economics.

Holmlund, B. and Kolm, A. S., 2001. International spillover effects of sectoral tax differentiation in unionised economies. Department of Economics, Working Paper, University of Uppsala, Sweden.

Jian, T. and Jeffrey, D„1996. Trends in regional inequality in China. NBER Working Paper 5412.

Kanbur, R. and Keen, M., 1993. Tax competition and the tax coordination when countries differ in size. The American Economic Review, September.

Levine, P., 1993. Fiscal policy co-ordination under EMU and the choice of monetary instruments. The Manchester School, 41, pp. 1-12, Supplement.

Levine, P. and Pearlman, J., 1992. Fiscal and monetary policy under EMU: Credible inflation target or unpleasant monetarist arithmetic? CEPR Discussion Paper, 701.

Martin, P., 1999. Are European regional policies delivering? ElBpaper. 4(2).

Masson, P., 2000. Fiscal policy and growth in the context of European integration. IMF Working Paper, WP: 00(133), IMF Research Department.

New Zealand Treasury. 2000. Economic and financial overview. Public Finance and Fiscal Policy, 2pp.

Orszag, J. M. and Snower, D. J., 1999. Anatomy of policy complementarities. The Institute for the Study of Labor (IZA), Discussion Paper, 41, Bonn, Germany.

Preamble to the Treaty of Rome 1958, 1991. Office for Official Publications of the European Communities,Luxemburg.

Purdy, D and Devine, P., 1994. Social Policy. In: The Economics of European Union. Oxford University Press, New York, USA.

Quah, D., 1996. Regional cohesion from local isolated actions: Historical outcomes” , mimeo, London School of Economics.

Romer, P. M., 1986. Increasing returns and long-run growth. Journal of Political Economy,94 (5).

Single European Act, Article 130a. 1986. Reaffirmed as Article 130a of the Treaty of Union, 1992. Official Publications of the European Communities, Luxemburg.

Spagnolo, G. 1999. Issue linkage. Delegation and International policy cooperation”. Working Paper, Churchill College and Stockholm School of Economics,Sweden.

Venables, A. J., 1999. Regional integration agreements: A force for convergence or divergence? Annual Bank Conference on Development Economics, Paris, June.

Yound, D. and Metcafe, S., 1994. Competition Policy. In: The Economics of European Union, Oxford University Press, New York, USA.




How to Cite




Management and Business Studies

Similar Articles

1 2 3 4 5 6 7 8 9 10 > >> 

You may also start an advanced similarity search for this article.

Most read articles by the same author(s)