Can Monetary Integration Improve Productivity? Empirical Evidence of Eurozone

Abstract

European monetary integration must be understood as an additional step towards strengthening the close ties that have been fostered after the Second World War. The aim of this research is to determine the effect of adopting the euro in terms of productivity growth, measured as the total factor productivity (TPF) variation. We used a panel data analysis with two-way fixed effects to estimate the effects of Euro adoption on the productivity growth. Two panels from 1996 to 2016 were used –one comprised 28 countries of EU members; the other only included 13 countries which joined the EU since 2004. Our findings suggest that the productivity growth of the countries that joined in 2004 and adopted the euro was higher compared to those that maintained their own currency. In addition, we find that FDI was the main channel through which the adoption of the euro influenced productivity growth.

Konvergencija bankovnih sustava EU

“…O značaju europske ekonomske i monetarne integracije, njenim prednostima i nedostacima provedena su brojna istraživanja (Dyson i dr., 1999;Lane, 2006;James, 2012;Butler, 2015;Fratianni, Von Hagen, 2019;Dandashly, Verdun, 2020). Kao najčešći poticaji za uključenje u monetarnu uniju i za postizanje najboljih efekata integracije, utemeljene na teoriji optimalnih valutnih područja, navode se sinkronizacija i standardizacija poslovnih procesa s drugim državama, fleksibilnost tržišta rada, bolja prilagodba i otvorenost ekonomija i diverzifikacija proizvodnje (Padilla, 2020). Butler (2015) uspoređuje europsku monetarnu uniju s jedinstvenim valutnim područjem saveznih država SAD-a ističući prednosti nepostojanja transakcijskih troškova zamjene valute u međusobnoj robnoj razmjeni među zemljama čime tržišta postaju efikasnija koristeći prednosti ekonomije obujma.…”

The Convergence Criteria of Monetary Integration and Economic Performance of Sub-Saharan African Countries

“…It took over four decades and involved a step-bystep process of block expansion. The introduction of a single currency has provided Europe with autonomy that would not otherwise exist (Leon, 2020).The creation of a single currency for the African countries has long been a pillar of African unity, a symbol of the strength that its backers' hope will emerge from success with efforts to integrate the continent. In Africa, monetary integration exists only with the Rand and the Franc zones.…”

“…It took over four decades and involved a step-bystep process of block expansion. The introduction of a single currency has provided Europe with autonomy that would not otherwise exist (Leon, 2020).…”