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The EU enlargement and economic growth in the CEE new member countries

Author

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  • Ryszard Rapacki
  • Mariusz Próchniak

Abstract

This paper analyses whether EU enlargement contributed to economic growth and real convergence in the ten new member countries from Central and Eastern. In this paper, we aim to check whether the EU enlargement contributed to economic growth of ten new member countries from Central and Eastern Europe (CEE-10), including their real convergence towards the EU-15 development level. To this end, we econometrically test the relationships between selected macroeconomic variables linked to the EU enlargement and the rate of economic growth of the CEE-10 countries over the period 1996-2007. The variables comprise: (i) the progress of market or structural reforms, (ii) economic freedom, (iii) foreign aid, and (iv) the FDI inflow. In the first part of the study, we test the convergence hypothesis (both beta and sigma) for the CEE-10 group towards the EU-15 countries. In the subsequent parts, we build an econometric model and carry out the correlation and regression analyses, with a view to find out the possible effect of the EU membership on economic growth of the CEE countries. The last part of the paper develops possible scenarios of the real convergence of the CEE countries towards the EU-15. Our results indicate that the EU enlargement significantly contributed to economic growth of the CEE-10 countries and their catching up with the EU-15 development level. This conclusion has been supported by both the convergence analysis and the econometric test of economic growth determinants. According to our projections, the actual process of real convergence between individual CEE-10 economies and the EU-15 may take between 8 and 33 years.

Suggested Citation

  • Ryszard Rapacki & Mariusz Próchniak, 2009. "The EU enlargement and economic growth in the CEE new member countries," European Economy - Economic Papers 2008 - 2015 367, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0367
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    References listed on IDEAS

    as
    1. Rapacki, Ryszard, 2008. "Regional Integration and Development Asymmetries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 93-114.
    2. repec:wbk:wbpubs:28241 is not listed on IDEAS
    3. repec:wbk:wbpubs:11855 is not listed on IDEAS
    4. Zbigniew Matkowski & Mariusz Próchniak, 2007. "Economic Convergence Between the CEE-8 and the European Union," Eastern European Economics, Taylor & Francis Journals, vol. 45(1), pages 59-76, February.
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    Keywords

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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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