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Growth effects of EU and EZ memberships: Empirical findings from the first 15 years of the Euro

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  • Dreyer, Johannes Kabderian
  • Schmid, Peter Alfons

Abstract

One of the major economic reasons for the creation of the European Union (EU) and of the Euro-zone (EZ) was an expected bonus of economic growth for member countries. Whilst several studies exist on the growth bonus of EU membership, there are none for the EZ, the latest and deepest step of economic integration in Europe. The aim of this article is to investigate whether EU and EZ memberships enhance growth for their members. In order to perform our empirical analysis, we estimate different growth models restricting the time frame to the first 15 years of the Euro - from 1999 to 2013. We find a positive impact of EU membership on economic growth, but no impact of being part of the EZ, except during the financial crisis, when the EZ has a negative impact on growth amongst its members. Considering the heated political debate related to the Brexit referendum, our results favour a “yes” to the EU but a less clear answer when it comes to the EZ.

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  • Dreyer, Johannes Kabderian & Schmid, Peter Alfons, 2017. "Growth effects of EU and EZ memberships: Empirical findings from the first 15 years of the Euro," Economic Modelling, Elsevier, vol. 67(C), pages 45-54.
    • Handle: RePEc:eee:ecmode:v:67:y:2017:i:c:p:45-54
    DOI: 10.1016/j.econmod.2016.09.007
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    Cited by:

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    8. Ioannatos, Petros E., 2021. "Systematic growth asymmetry in the Eurozone? Evidence from a natural experiment," The Journal of Economic Asymmetries, Elsevier, vol. 24(C).

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    More about this item

    Keywords

    F15; F33; F43; O52; Economic integration; EU and EZ memberships; Neoclassical growth model; Endogenous growth theory; Growth bonus; Brexit;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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