Whereas the customary trade models suggested that economic consolidation would result to a tangible merging in expansion levels amongst nations involved, some modern models recognized that consolidation might as well generate rising developmental irregularities. A comparable conclusion can be drawn from new theories of economic development that have not confirmed the merging theory. Latest empirical researches imply that the tendency towards income level merging have a tendency to occur inside homogeneous sets of nations, while heterogeneous sets are expected to suffer tangible divergence trends (Dell et al., 2012).
The effectiveness of any economy is usually connected to the fiscal performance assessed through economic development. The chief policy aim of a country is to arouse output as an essential base for social and economic growth. The determining factors of economic growth may vary through time and space (Vojtovic, 2013). Depending on the procedural, hypothetical approach or analysis on time span, the variables linked to economic growth often considered are comparatively broad. Amongst the elements that are frequently incorporated in the development regression models, an individual can generally discover such simple financial pointers as inflation, hire, existing account balance, government debt, imports and export, capital formation, FDI etc., as well as other factors correlated to the quantity in addition to quality of work capitals in the nation, technological development, social and political dynamics or naturally occurring resources.