Euro Area Growth and European Institutional Reforms

Comunale, Mariarosaria; Mongelli, Francesco Paolo

doi:10.1017/9781108782517.003

Cited by 3 publications

(3 citation statements)

References 42 publications

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“…The EU institutional integration index EURII is the main variable associated with higher GDP growth in the long run for both core and periphery (Table 3). An interesting narrative emerges from the different EURII components, and the difference between core and periphery (see Comunale and Mongelli, 2020). 22 In the short -run, we can see a positive effect of fiscal integration on periphery 20 The instruments are model-selected lags of our variables.…”

Section: Main Results With the Pecmmentioning

confidence: 98%

Tracking growth in the euro area subject to a dimensionality problem

Comunale

Mongelli

2021

Applied Economics

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We investigate which variables have supported growth in the euro area over the last 30 years. This is a challenging task due to dimensionality problems: a large set of potential determinants, limited data, and the prospect that some variables could be non-stationary. We assemble a set of 35 real, financial, monetary, and institutional variables for nine of the original euro area countries covering the period between 1990Q1 and 2016Q4. Using the Weighted-Average Least Squares method, we gather clues about which variables to select. We quantify the impact of various determinants of growth in the short and long runs. Our main finding is the positive and robust role of EU institutional integration on longterm growth for all countries in the sample. An improvement in competitiveness matters for growth in the overall euro area in the long run, as well as a decline in sovereign and systemic stress. Debt over GDP negatively influences growth for the periphery, but only in the short run. Property and equity prices have a significant impact only in the short run, whereas the loans to non-financial corporations positively affect the core euro area. An increase in global GDP also supports growth in the euro area.

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Section: Main Results With the Pecmmentioning

confidence: 98%

Tracking growth in the euro area subject to a dimensionality problem

Comunale

Mongelli

2021

Applied Economics

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“…Looking into the variables which are linked to differences in growth rates the fi ndings affi rm a positive association of the EU institutional and political integration with long-run growth, for periphery countries particularly (Comunale and Mongelli 2019a). In the opposite direction, deeper fi nancial integration seems to have benefi cial effects on the core economies, but it is not signifi cant in the periphery (Comunale and Mongelli 2019b).…”

Section: περιφερειαmentioning

confidence: 93%

Banking Union: Where does it stand? What next?

Kolliopoulos¹

2020

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In response to the fi nancial crisis, the Eurozone pursued a number of initiatives to create a safer fi nancial sector for the single market. However, the divergent preferences between core and periphery countries and the negative legacy of the crisis have watered down ambitious reform plans for substantial risk-sharing arrangements. In this context, the Eurozone cannot strike a balance between solidarity and crisis prevention. Compared to mid-2012, the “window of opportunity” for strengthening the banking union seems closed for the moment. Paradoxically, doing reforms in fair weather is much more diffi cult, while the immediate reason for the sudden move to Banking Union was the intensifying euro sovereign crisis. As a consequence, the implemented reforms have limited scope and they leave room to fi nancial markets for a disciplining role over states.

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“…For the long run, instead, a deeper financial integration seems to have beneficial effects on the core, while such integration is not significant in the periphery. The opposite holds for political integration, as an increase in the latter boosts long-run growth only for the core members of the euro area (see also Comunale and Mongelli (2019) for the complete set of results coming from the EURII components and country sub-samples).…”

Section: [Insert Table 3 Around Here]mentioning

confidence: 99%

Who did it? A European Detective Story Was it Real, Financial, Monetary and/or Institutional: Tracking Growth in the Euro Area with an Atheoretical Tool

Comunale

Mongelli

2020

SSRN Journal

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During the past thirty years, euro area countries have undergone significant changes and experienced diverse shocks. We aim to investigate which variables have consistently supported growth in this tumultuous period. The paper unfolds in three parts. First, we assemble a set of 35 real, financial, monetary and institutional variables for all euro area countries covering the period between 1990Q1 and 2016Q4. Second, using the Weighted-Average Least Squares (WALS) method, as well as other techniques, we gather clues about which variables to select. Third, we quantify the impact of various determinants of growth in the short and long runs. Our main finding is the positive and robust role of institutional reforms on long-term growth for all countries in the sample. An improvement in competitiveness matters for growth in the overall euro area in the long run as well as a decline in sovereign and systemic stress. The debt over GDP negatively influences growth for the periphery, but only in the short run. Property and equity prices have a significant impact only in the short run, whereas the loans to NFCs positively affect the core euro area. An increase in global GDP also supports growth.

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Euro Area Growth and European Institutional Reforms

Cited by 3 publications

References 42 publications

Tracking growth in the euro area subject to a dimensionality problem

Tracking growth in the euro area subject to a dimensionality problem

Banking Union: Where does it stand? What next?

Who did it? A European Detective Story Was it Real, Financial, Monetary and/or Institutional: Tracking Growth in the Euro Area with an Atheoretical Tool

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