European Integration, Economic Growth and Convergence - An Analysis of EU Membership Implications on Long Run Growth

Abstract: The economic role of the European Union is ever more questioned around the continent and is driven forward by increasingly popular political powers in various European countries. This study attempts to analyse the economic implications of the EU membership on member states, and if effects of varying extent can be observed for different parts of the union. It is observed that in the short run, there is a slightly negative effect on growth, possibly as a result of certain initial costs associated with the membership. The results conclude however that significant positive and increasing effects on economic growth, due to EU membership, can be determined in the medium to long run for Eastern European countries as well as for member states with relatively lower GDP per capita. There was no significant evidence suggesting likewise for Western European countries and those with relatively higher GDP per capita.