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Regional growth and convergence via integration – the case of the large EU

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  • Paavo Okko

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    Abstract

    The coming Eastern enlargement of the EU will be a fundamentally different step in the history of the European integration. It will create a new situation in which growth conditions and regional adjustment requirements of Europe are going to change, too. The theory of economic growth and regional structures has developed recently in an interesting way. Especially the endogenous growth theory and models of the new economic geography offer relevant approach for interpretations. There is a strong tendency towards factor price equalisation and towards income convergence. But regional differences in other respects may become even larger via this process. The enlargement of the EU is an interesting case from this point of view. There are very large income differences, which are assumed to diminish, but it seems impossible to happen without a fundamental regional restructuring. The target of the paper is to make a survey on the growth theory and regional restructuring literature from the point of view of European integration. The idea is to make an evaluation and prediction on the real convergence prospects of the large EU. Eastern enlargement is an opportunity to faster growth in Europe, but the regional specialization and restructuring is a crucial condition for materializing of this result.

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    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa03p445.

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    Date of creation: Aug 2003
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    Handle: RePEc:wiw:wiwrsa:ersa03p445

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    1. Hlouskova, Jaroslava & Wagner, Martin, 2002. "The CEEC10's Real Convergence Prospects," CEPR Discussion Papers 3318, C.E.P.R. Discussion Papers.
    2. Barro, Robert J, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 407-43, May.
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    7. Magnus Henrekson & Johan Torstensson & Rasha Torstensson,, . "Growth Effects of European Integration," Discussion Papers 96/1, University of Nottingham, CREDIT.
    8. Richard Baldwin, 1989. "The Growth Effects of 1992," NBER Working Papers 3119, National Bureau of Economic Research, Inc.
    9. Sala-i-Martin, X., 1994. "Regional Cohesion: Evidence and the Theories of Regional Growth and Convergence," Papers 716, Yale - Economic Growth Center.
    10. Marius Brülhart, 2001. "Evolving geographical concentration of European manufacturing industries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(2), pages 215-243, June.
    11. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
    12. Boldrin, Michele & Canova, Fabio, 2003. "Regional Policies and EU Enlargement," CEPR Discussion Papers 3744, C.E.P.R. Discussion Papers.
    13. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc.
    14. Romer, P.M., 1988. "Capital Accumulation In The Theory Of Long Run Growth," RCER Working Papers 123, University of Rochester - Center for Economic Research (RCER).
    15. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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