Working Paper: CEPR ID: DP6820
Authors: Barry Eichengreen; Andrea Boltho
Abstract: Economic integration, from the European Payments Union and the European Coal and Steel Community to the Common Market, the European Monetary System, the Single Market, and the euro, is one of the most visible, controversial and commented-upon aspects of Europe?s development since the end of World War II. It is hard to imagine that Europe?s economy would have developed the same way without it. Or is it? We see how far we can push the argument that European living standards, growth rates, and economic structure would have been little different in the absence of the institutions and processes that have culminated in today?s European Union. We adopt the methodology applied by Fogel to the railroads: suspecting that the results are small, wherever possible we adopt assumptions that bias upward the estimated impact. We conclude that European incomes would have been roughly 5 per cent lower today in the absence of the EU.
Keywords: European integration; European Union
JEL Codes: F0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| EU membership (F36) | European incomes (N94) |
| European Payments Union (EPU) (F36) | intra-European trade (N73) |
| European Payments Union (EPU) (F36) | economic growth (O49) |
| EU membership (F36) | trade liberalization (F13) |
| EU membership (F36) | capital mobility (F20) |
| EU membership (F36) | investment (G31) |