Benefits of EMU Participation: Estimates Using the Synthetic Control Method

CentER Discussion Paper Series No. 2017-032

66 Pages Posted: 30 Aug 2017

See all articles by Loes Verstegen

Loes Verstegen

Tilburg University

Bas van Groezen

Tilburg University; Tilburg University - Center for Economic Research (CentER)

A. C. Meijdam

Tilburg University - Center for Economic Research (CentER); Tilburg University - Department of Economics

Date Written: August 28, 2017

Abstract

This paper investigates quantitatively the benefits from participation in the Economic and Monetary Union for individual Euro area countries. Using the synthetic control method, we estimate how real GDP per capita would have developed for the EMU member states, if those countries had not joined the EMU. The estimates show that most countries have profited from having the euro, though the crisis leads to negative effects of EMU membership. The PIGS countries, in particular, would have been better off if they had not been an EMU member during the crisis, however, Greece, Portugal and Spain experienced the largest benefits of EMU participation in the pre-crisis period.

Keywords: Economic Growth, Euro Area, Synthetic Control Method, Monetary Union

JEL Classification: C23, E65, F33, F36, F43, F45

Suggested Citation

Verstegen, Loes and van Groezen, Bas J.A.M. and Meijdam, A.C. (Lex), Benefits of EMU Participation: Estimates Using the Synthetic Control Method (August 28, 2017). CentER Discussion Paper Series No. 2017-032. Available at SSRN: https://ssrn.com/abstract=3027932 or http://dx.doi.org/10.2139/ssrn.3027932

Loes Verstegen (Contact Author)

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

Bas J.A.M. Van Groezen

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

A.C. (Lex) Meijdam

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 23 85 (Phone)
+31 13 466 30 42 (Fax)

Tilburg University - Department of Economics

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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