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Integration and Conditional Convergence in the Enlarged EU Area. CEPS ENEPRI Working Papers No. 31, 1 February 2005

Kaitila, Ville. (2005) Integration and Conditional Convergence in the Enlarged EU Area. CEPS ENEPRI Working Papers No. 31, 1 February 2005. [Working Paper]

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    Abstract

    This 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 – the eight Central and Eastern European countries (CEECs) – 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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    Item Type: Working Paper
    Uncontrolled Keywords: Convergence.
    Subjects for non-EU documents: Countries > Austria
    Countries > Belgium
    Countries > Denmark
    Countries > Estonia
    Countries > Finland
    Countries > France
    Countries > Germany
    Countries > Greece
    Countries > Hungary
    Countries > Ireland
    Countries > Italy
    Countries > Latvia
    Countries > Lithuania
    Countries > Luxembourg
    Countries > Netherlands
    Countries > Poland
    Countries > Portugal
    Countries > Slovak Republic
    Countries > Slovenia
    Countries > Spain
    Countries > Sweden
    Countries > U.K.
    Countries > Bulgaria
    Countries > Czech Republic
    Countries > Cyprus
    EU policies and themes > Policies & related activities > economic and financial affairs > EMU/EMS/euro
    EU policies and themes > Policies & related activities > employment/labour market > labour/labor
    EU policies and themes > EU institutions & developments > institutional development/policy > historical development of EC (pre-1986)
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > ENEPRI Working Papers
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 23 Feb 2008
    Page Range: p. 20
    Last Modified: 09 Jan 2020 16:30
    URI: http://aei.pitt.edu/id/eprint/6735

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