Integration and Conditional Convergence in the Enlarged EU Area
AbstractThis working paper analyses conditional convergence in Europe and also tries to assess the impact that arises from integration. Using a pooled mean-group estimation method, we first analyse the conditional convergence of GDP per labour force in the area covering the 15 member states of the European Union (EU-15) in 1960-2002. Conditional convergence is well-documented for the EU-15. Higher investment, lower public consumption and lower inflation have contributed positively to GDP growth. Deeper European integration is shown to have accelerated growth when inflation is not included in the specification, but not otherwise. The evidence on the effect of integration on growth is therefore mixed. We then apply the same method to estimate the growth of GDP per labour force in the new EU member states â the eight Central and Eastern European countries (CEECs) â for the period 1993-2002. These countries are shown to have converged conditionally towards the average level of GDP per labour force in the EU-15. Higher investment and lower public consumption have also supported growth in the CEECs.
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Bibliographic InfoPaper provided by The Research Institute of the Finnish Economy in its series Discussion Papers with number 935.
Length: 17 pages
Date of creation: 2004
Date of revision:
Other versions of this item:
- Ville Kaitila, 2005. "Integration and Conditional Convergence in the Enlarged EU Area," Economics Working Papers 031, European Network of Economic Policy Research Institutes.
- F15 - International Economics - - Trade - - - Economic Integration
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-29 (All new papers)
- NEP-EEC-2006-01-29 (European Economics)
- NEP-GEO-2006-01-29 (Economic Geography)
- NEP-TRA-2006-01-29 (Transition Economics)
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