This paper explores how economic integration can lead to long-term growth in a world with two similar, developed economies. It considers two models of the research and development (R&D) sector that drive growth. In both models, economic integration can increase the long-run growth rate by encouraging the global exploitation of increasing returns to scale in the R&D sector. The paper distinguishes between one-shot gains (level effects) and permanent changes in the growth rate (growth effects). It argues that conventional neoclassical growth models underestimate the importance of integration, while endogenous growth models suggest that integration can significantly boost long-term growth. The paper analyzes two specifications of the R&D technology. In the knowledge-driven model, R&D relies on human capital and knowledge, leading to a two-sector structure. In the lab equipment model, R&D uses physical capital and labor, leading to a single-sector structure. Both models show that economic integration can increase the growth rate by expanding the market size and increasing the productivity of human capital. The paper also discusses the effects of trade in goods and flows of ideas. In the knowledge-driven model, trade in goods has no permanent effect on growth, but allowing flows of ideas leads to a permanent increase in the growth rate. In the lab equipment model, trade in goods alone can lead to a permanent increase in the growth rate, as it increases the market size and the productivity of human capital. The paper concludes that economic integration can lead to long-term growth by increasing the market size and the productivity of human capital. It also highlights the importance of communication networks in facilitating the flow of ideas and the role of patents in protecting intellectual property. The paper emphasizes that economic integration is not the same as political integration and that the effects of integration depend on the specific characteristics of the economies involved. The paper also notes that the models considered are simplified and that further research is needed to fully understand the effects of economic integration on growth.This paper explores how economic integration can lead to long-term growth in a world with two similar, developed economies. It considers two models of the research and development (R&D) sector that drive growth. In both models, economic integration can increase the long-run growth rate by encouraging the global exploitation of increasing returns to scale in the R&D sector. The paper distinguishes between one-shot gains (level effects) and permanent changes in the growth rate (growth effects). It argues that conventional neoclassical growth models underestimate the importance of integration, while endogenous growth models suggest that integration can significantly boost long-term growth. The paper analyzes two specifications of the R&D technology. In the knowledge-driven model, R&D relies on human capital and knowledge, leading to a two-sector structure. In the lab equipment model, R&D uses physical capital and labor, leading to a single-sector structure. Both models show that economic integration can increase the growth rate by expanding the market size and increasing the productivity of human capital. The paper also discusses the effects of trade in goods and flows of ideas. In the knowledge-driven model, trade in goods has no permanent effect on growth, but allowing flows of ideas leads to a permanent increase in the growth rate. In the lab equipment model, trade in goods alone can lead to a permanent increase in the growth rate, as it increases the market size and the productivity of human capital. The paper concludes that economic integration can lead to long-term growth by increasing the market size and the productivity of human capital. It also highlights the importance of communication networks in facilitating the flow of ideas and the role of patents in protecting intellectual property. The paper emphasizes that economic integration is not the same as political integration and that the effects of integration depend on the specific characteristics of the economies involved. The paper also notes that the models considered are simplified and that further research is needed to fully understand the effects of economic integration on growth.