Growth effects of economic integration. The case of the EU Member States (1950-2000).

Badinger, Harald (2001) Growth effects of economic integration. The case of the EU Member States (1950-2000). EI Working Papers / Europainstitut, 40. Forschungsinstitut für Europafragen, WU Vienna University of Economics and Business, Vienna.


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Has economic integration improved the postwar growth performance of the actual fifteen member states of the European Union (EU)? To answer this question, we first construct an index of integration for each member state that explicitly accounts for global integration (GATT) as well as regional (European) integration. Using this variable, we test for permanent and temporary growth effects in a dynamic growth accounting framework, both in a time series setting for the (aggregate) EU and a panel approach for the EU member states. Although the hypothesis of permanent growth effects as postulated by endogenous growth models with scale effects is clearly rejected, we find significant levels effects: GDP per capita of the EU would be approximately one fifth lower today, if no integration had taken place since 1950. Interestingly, two third of this effect are due to GATT-liberalization. (author's abstract)

Item Type: Paper
Keywords: economic growth / economic integration / panel data / European Union
Classification Codes: JEL C33, F15, F43, O52
Divisions: Forschungsinstitute > Europafragen
Depositing User: Repository Administrator
Date Deposited: 05 Apr 2002 08:32
Last Modified: 22 Oct 2019 00:41


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