Comparative Advantages and the Price of the Factor of Production Labour in a Frictionless Economic Area. The Case of Romania and Bulgaria

Authors:

Pages: 11-27

Abstract:

The paper aims to clarify in terms of political economy why countries in Central and Eastern Europe, with a special and distinct focus on Romania and Bulgaria (defined later in text also as ”the pair RO&BG”) are seemingly unable, at least in the short and medium term, to positively alter their relative position inside the wider European economic area and particularly inside the European Union of which they are recent member states. Commencing on a statement made by Jean Francois Revel in the mid nineties and which epitomizes the travails such an economy has to endure in order to make the transition from Plan to Market, the paper develops then on the basis of the postulate of the Stolper-Samuleson theorem which states that a developing economy is not necessarily best served by excessive openness to trade flows. The paper argues, with data, that while benefits of the integration into the single market are to a certain extent undeniable so are the costs and for some reasons, which are explained in the paper, the latter are sometimes outweighing benefits. Small open economies are adversely affected by the excessive openness to trade brought by the integration as instead of a “normal” relation of interdependence they tend to fall into a relation of “dependence” and thereby land into the undesired and undesirable status of “dependency”. Dependencies are bound to “trail” their “metropolis of sorts” and thus an improvement in their relative position becomes hardly possible or simply takes a time, humanely, hard to accept. Accordingly, people are just RIGHT to be angry and frustrated about it, but so they were RIGHT when they joined it simply because when they exited communism, they did not realize that they were not at the level at which they entered it, but far much below it! The pair of Bulgaria and Romania are an epitome of such a development. Their case will be highlighted by the paper

Keywords:

Stolper-Samuelson theorem, over and under-valuation of GDP, economic centricity, gravity models, “expansion phase” of the cycle, “collapse phase” of the cycle, frictionless economic area, “the Pair RO&BG”, “periphery trap”.

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Diversification of Political and Economic Cooperation between the European Union and the Arab Countries after Arab Spring

Authors:

Pages: 11-16

Abstract:

The study focuses on relations between the GCC (The council for the countries of the Gulf) and the EU and trade exchanges between them. Also are analyzed the trade exchanges between EU and the Arab world in recent years. Based on presented facts are made conclusions about the political and economic situation and opportunities for developing relation between EU and Arab Mediterranean countries Keywords: Arab spring, Arab countries, European Union, trade exchange.

Keywords:

F02, F10, F20

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