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1 - Euro Area Growth and European Institutional Reforms

from Part I - Economic Growth and Structural Reforms in Europe

Published online by Cambridge University Press:  31 March 2020

By
Mariarosaria Comunale  and
Francesco Paolo Mongelli
Edited by
Nauro F. Campos ,
Paul De Grauwe  and
Yuemei Ji
Nauro F. Campos
Affiliation:
University College London
Paul De Grauwe
Affiliation:
London School of Economics and Political Science
Yuemei Ji
Affiliation:
University College London
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Summary

Euro area countries have experienced profound economic, financial and institutional changes over the last three decades. GDP growth has been very volatile, and very uneven, across countries. Which factors played a role in stirring growth and/or reducing it?We provide an atheoretical toolkit looking at a large set of real, financial, monetary and institutional variables, as possible factors behind fluctuations and differences in growth rates among euro area countries since 1990. The main outcome stresses the key positive role for long-run growth of higher European institutional integration, overall and for the periphery in specific. This result is robust across specifications and setups. If we split the European institutional integration into its main components, we can see a significant positive role for financial and political integration in the long run. However, the first seems to have beneficial effects for the core only, while the opposite holds for the political integration, which influences positively the periphery.

Keywords

euro areaGDP growthmonetary policyfiscal policyinstitutional integrationfinancial crisissystemic stresssynchronization
Type
Chapter
Information
Economic Growth and Structural Reforms in Europe , pp. 9 - 36
Publisher: Cambridge University Press
Print publication year: 2020

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