ABSTRACT
In this chapter we provide a simple analysis of the macroeconomic impact of increasing 'accessibility' within the context of a small open region. We interpret improving accessibility as implying increasing spatial integration of both commodity and labour markets. Since our context is that of a small, open region the focus of our analysis is quite distinct from most of those dealing with the macroeconomics of European integration in that we start from a position in which the subject economy has no monetary autonomy. The region is treated throughout as a price taker in a spatially integrated national financial market, so that our concern is solely with the effects of greater spatial integration of the real economy within an existing monetary union.
