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EU Expansion and EU Growth

Author

Listed:
  • Alan V. Deardorff

    (University of Michigan)

  • Robert M. Stern

    (University of Michigan)

Abstract

Almost from its inception as the European Economic Community, the European Union has excited the hope if not the expectation that it would generate dynamic gains from trade, including perhaps a permanent increase in the rates of growth of participating countries. This paper examines the empirical evidence relating to this issue and then interprets the economic performance of the EU countries in terms of a simple theoretical model of economic integration with increasing returns to scale. The paper concludes that evidence for increased long-run growth rates of the EU countries is weak, and that what may have happened instead is that countries have benefited asymmetrically from the formation and the later expansion of the EU. Benefits of economic integration appear to accrue - in the form of temporarily higher growth rates leading to higher levels of per capita income - first to large countries and then to some smaller countries that entered the arrangement relatively early.

Suggested Citation

  • Alan V. Deardorff & Robert M. Stern, 2002. "EU Expansion and EU Growth," Working Papers 487, Research Seminar in International Economics, University of Michigan.
  • Handle: RePEc:mie:wpaper:487
    as

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    File URL: http://fordschool.umich.edu/rsie/workingpapers/Papers476-500/r487.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Lee, Hiro & van der Mensbrugghe, Dominique, 2004. "EU enlargement and its impacts on East Asia," Journal of Asian Economics, Elsevier, vol. 14(6), pages 843-860, January.
    2. Tomasz Brodzicki, 2005. "Econometric Analysis of Impact of Relative Location on the Growth Effects of Economic Integration. The case of the EU," Working Papers of Economics of European Integration Division 0603, The Univeristy of Gdansk, Faculty of Economics, Economics of European Integration Division, revised Jan 2006.
    3. Charles WYPLOSZ, 2006. "Deep Economic Integration: Is Europe a Blueprint?," Asian Economic Policy Review, Japan Center for Economic Research, vol. 1(2), pages 259-279.
    4. Tomasz Brodzicki, 2005. "Relative Centrality or Peripheriality and the Growth Effects of Relative Centrality or Peripheriality and the Growth Effects of Economic Integration within the European Union," International Trade 0510005, EconWPA.
    5. Wilhelm Kohler, 2006. "The “Lisbon Goal” of the EU: Rhetoric or Substance?," Journal of Industry, Competition and Trade, Springer, vol. 6(2), pages 85-113, June.

    More about this item

    Keywords

    European integration; Trade and growth;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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