Is the European Union growing closer or apart? : A quantitative study examining the EU and its growth characteristics

Abstract: In the aftermath of the Brexit referendum, a public debate both whether membership in the European Union and the implementation of the euro, by joining the European Monetary Union provide economic benefits, is heating up and is a popular topic within the political scene. This has resulted in member states starting to doubt if it makes fiscal sense to stay in the union. However, the existing studies unanimously point towards the EU has a positive effect on growth. Our study analyzes and attempts to conclude if there is economic convergence within the European Union. We also differentiate between countries adopting the euro in addition to EU memberships in order to see if they provide additional growth effects. The time frame ofthe model is between 1995 and 2017. During these 22 years, the study concludes economic convergence within the EU, which is especially desirable for developing countries. However, we found no supporting evidence of joining the EMU to have neither lower nor higher growth. By returning to the public debate, we would favor joining the European Union but be hesitant to adopt the euro by joining the common currency area.