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Capital markets integration and economic growth in the European Union

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  • Orlowski, Lucjan T.

Abstract

This paper argues that a deeper integration of capital markets in the European Union is necessary to support accelerated economic growth. Further integrated equity and bond markets will provide access to capital funding improve the allocation of capital, help mitigate market and systemic risks, and ultimately foster a counter-cyclical, sustained real economy growth. The paper provides evidence that the increases in both total portfolio equity and debt to GDP ratios in the euro area actively contribute to real GDP growth.

Suggested Citation

  • Orlowski, Lucjan T., 2020. "Capital markets integration and economic growth in the European Union," Journal of Policy Modeling, Elsevier, vol. 42(4), pages 893-902.
    • Handle: RePEc:eee:jpolmo:v:42:y:2020:i:4:p:893-902
    DOI: 10.1016/j.jpolmod.2020.03.012
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    Cited by:

    1. Zining Li & Congxin Li, 2024. "Does Market Integration Improve Air Quality: A Study Based on Spatial Models," Sustainability, MDPI, vol. 16(23), pages 1-18, November.

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    More about this item

    Keywords

    Capital markets integration; Capital market-based financing; Bank-based financing; Risk sharing;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions

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