Interdependent Growth in the EU: The Role of Trade

María García-Vega and José Herce ()

No 11, Economics Working Papers from European Network of Economic Policy Research Institutes

Abstract: After properly modelling growth externalities and using spatial econometric techniques we investigate whether economic integration promotes interdependent growth among countries. We conclude that this has been indeed the case for advanced OECD countries and that, for those countries belonging to the EU, through successive enlargements, the effect has been even stronger. More precisely, if every (trade) partner of a given country experiences an extra growth of 1 percentage point, this economy will profit from an extra 0.5 point, and if this country belongs to the EU it will have an additional increase of its rate of growth of 0.2 points. Both figures can be interpreted as growth externalities with the latter suggesting that an integration process like the one followed by the EU has an (positive) effect on growth.

JEL-codes: F15 F43 O47 R11 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2002-09
New Economics Papers: this item is included in nep-dev and nep-eec
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Citations: View citations in EconPapers (2)

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