Does the Euro enhance Economic Growth? EU and EZ Growth Effects following the Introduction of the Euro

Johannes Kabderian Dreyer, Peter A. Schmid

Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

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 associated to member states. While several studies exist on the growth bonus of the 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 the EU and EZ memberships enhance growth of their members. In order to
perform our empirical analysis, we apply an augmented Solow growth model using convergence analysis and the panel Generalized Method of Moments (GMM) to estimate its coefficients. We restrict the time frame of our research on the first 14 years of the Euro - from 1999 to 2012. In line with economic intuition we find a positive and neutral impact of EU and EZ memberships on economic growth respectively. These economic results can be considered
especially interesting to new potential EZ members, such as some of the Central Eastern European Countries (CEE), who are about or in the process to join the common currency club.
Original languageEnglish
Title of host publicationProceedings of the 15th International Conference on Finance and Banking
EditorsI. PALEČKOVÁ, I. SZAROWSKÁ
Place of PublicationKarviná
PublisherSilesian University
Publication date2016
Pages72-83
ISBN (Print)978-80-7510-186-0
Publication statusPublished - 2016

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