Discussion Paper Details

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Title: Growth Effects of European Integration

Author(s): Magnus Henrekson and Rasha Torstensson

Publication Date: September 1996

Keyword(s): Economic Growth, European Integration, Long-run Growth and Regional Integration

Programme Area(s): International Trade and Regional Economics

Abstract: This paper deals with the effects of European integration in the EC and EFTA on economic growth. Base regressions suggest that EC and EFTA memberships do in fact have a positive and significant effect on economic growth, and that there is no significant difference between EC and EFTA membership. This result is not completely robust with respect to changes in the set of control variables and to measurement errors. Nonetheless, the results suggest that regional integration may not only affect resource allocation, but also long-run growth rates. This conclusion is strengthened by the fact that we obtain similar results when we use panel data for a sample of OECD countries. In addition, we explore possible indirect effects of regional integration.

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Bibliographic Reference

Henrekson, M and Torstensson, R. 1996. 'Growth Effects of European Integration'. London, Centre for Economic Policy Research.