Complete economic integration is the final stage of

economic integration Economic integration is the unification of economic policies between different states, through the partial or full abolition of tariff and non-tariff restrictions on trade. The trade-stimulation effects intended by means of economic integrati ...

. After complete economic integration, the integrated units have no or negligible control of economic policy, including full

monetary Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are ...

union and complete or near-complete

fiscal policy In economics and political science, fiscal policy is the use of government revenue collection ( taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variabl ...

harmonisation. Complete economic integration is most common within

countries A country is a distinct part of the world, such as a state (polity), state, nation, or other polity, political entity. It may be a sovereign state or make up one part of a larger state. For example, the country of Japan is an independent, so ...

, rather than within supranational institutions. An example of this are the original thirteen colonies of the

United States of America The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territo ...

, which can be viewed as a series of highly integrated quasi-autonomous nation states. In this example it is true that complete economic integration results in a

federalist The term ''federalist'' describes several political beliefs around the world. It may also refer to the concept of parties, whose members or supporters called themselves ''Federalists''. History Europe federation In Europe, proponents of de ...

system of governance as it requires political union to function as, in effect, a single economy.

Complete economic integration

Complete economic integration is required because for an economic union to be most effective it is necessary for all provinces to be at the same stage of the economic cycle. Although ''provinces'' is a narrow description as within a specific geographic area there is a much greater amount of mini-economies, all in different stages of the economic cycle; it is in theory possible for a single town to be in recession/boom whilst another is experiencing the opposite. In a practical sense it is best for as many of these economic microcosms to be at the same stage of the economic cycle as possible as it results in government policy having its effectiveness maximized, whether it be through the employment of fiscal or monetary policy. To achieve economic harmonization requires increasing central control to pursue an economic area wide policy of inflation competence and stability promotion. Though this is often viewed as a loss of provincial political sovereignty it is necessary to remove disparities and thus unfair advantages with certain firms across the economic area to provide the best conditions possible for the promotion of competition and therefore economic efficiency.

Complete economic integration

See also