The purpose of economic theory is twofold. First, its objective is to identify those assumptions to which the predicted results are critically sensitive. This enables the user to judge the relevance of the analysis to a situation in which those assumptions are to some degree invalid. Second, the aim is to produce predictions concerning the results which may be expected to follow from specified changes in the situation. The predictions will hopefully be useful in formulating judgements as to whether the postulated changes are or are not in some sense advantageous; testing such predictions against observed reality also enables an assessment to be made of the validity of the underlying theory. In the case of customs union theory such testing is of particular relevance, since the analysis which has now been explored at some length indicates that the outcome of entry into a customs union is a distinctly ambiguous entity: the result may be a gain in some circumstances and a loss in others.
Unable to display preview. Download preview PDF.
- Balassa, B. A. (ed.), European Economic Integration (Amsterdam: North-Holland, 1975).Google Scholar
- Marques Mendes, A. J., ‘The contribution of the European Community to economic growth’, Journal of Common Market Studies, Vol. XXIV, No. 4, June 1986.Google Scholar
- Marques Mendes, A. J., Economic integration and growth in Europe (London: Croom Helm, 1986).Google Scholar
- Mayes, D. G., ‘The effects of economic integration on trade’, Journal of Common Market Studies, Vol. XVII, No. 1, September 1978.Google Scholar
- Owen, N., Economies of Scale … within the European Community (London: Oxford University Press, 1983).Google Scholar
- Robson, P., The Economics of International Integration, 2nd edn (London: Allen & Unwin, 1964).Google Scholar