In recent decades the world economy has been characterized by deepening and widening integration. Throughout this time, there have been concerns that this process may foster the geographical concentration of industries, a view substantiated by contributions to the new economic geography. In this book, Barbara Dluhosch opposes this position and presents an entirely different view of the consequences of globalization. Barbara Dluhosch carefully identifies and analyses the main pillars of the new economic geography. She then presents an essentially new approach focusing on the decline of communication costs, and introduces cost competition and technological choice, which have largely been neglected. In doing so, she arrives at fundamentally different conclusions and provides new insights into the consequences of regional integration and the process of globalization. Finally, the policy implications of this are critically evaluated by drawing on experiences of European economic integration.

How can the notion of competitiveness be reasonably applied to an economy? What relation does high or low competitiveness have to the current account? Do huge and persistent imbalances really reflect competitive positions of local firms or are they merely due to a misalignment of exchange rates or even outright protectionism, as the US-Japan trade conflict suggests?All these questions are rigorously addressed in International Competitiveness and the Balance of Payments. In examining the determinants of current account balances the conventional competitiveness approach - in which deficits are assumed to indicate low competitiveness - is contrasted with an intertemporal view of the balance of payments. By emphasizing locational quality as the decisive factor in international competitiveness, the authors are able to offer fundamentally different conclusions about the determinants of current account debates. As well as theoretical evidence advocating the intertemporal view, the authors present four case studies in support of this approach: Germany before and after unification, Spain before joining the EMS, the United States since the early 1980s, and Japan's persistent current account surpluses.