IDEAS home Printed from https://ideas.repec.org/a/rau/rseijr/v1y2015i2p50-73.html
   My bibliography  Save this article

Structural Funds As The Solution A To The Present Crisis:Romania – A Case Study

Author

Listed:
  • Alexandru Pătruți

    (Bucharest University of Economic Studies)

  • Alina Tătulescu

    (Bucharest University of Economic Studies)

Abstract

Numerous economists believe that structural funds provided by the European Union can be the means by which the economy can recover from the present crisis. Popular belief seems to also support this thesis. However, we consider that only economic reasoning can validate such a conclusion and that rational analysis is needed in this sense. By using the monetary theory of the trade cycle, we argue that economic crises consist in misallocations of scarce capital goods, which are triggered by artificial bank credit expansion. Although the EU structural funds represent a way through which additional capital can be attracted into a certain country, there is no a priori reason for which to assume that these new investments can neutralize the effects of the boombust cycle. Moreover, a fairly strong case can be made that structural instruments cause supplementary misallocations of factors of production, aggravating and prolonging the present economic downturn. The essence of our argument lies in the fact that European funding will probably be used to supply investment projects which do not respond to the most urgent needs of the consumers. It is only real capital accumulation that can foster economic growth—the much needed remedy for the current economic situation. By using empirical data available from official sources, we will illustrate these theoretical results on the Romanian economy.

Suggested Citation

  • Alexandru Pătruți & Alina Tătulescu, 2015. "Structural Funds As The Solution A To The Present Crisis:Romania – A Case Study," Review of Social and Economic Issues, Romanian-American University, vol. 1(2), pages 50-73, march.
    • Handle: RePEc:rau:rseijr:v:1:y:2015:i:2:p:50-73
    as

    Download full text from publisher

    File URL: http://www.rebe.rau.ro/RePEc/rau/rseijr/SP15/RSEI-SP15-A3.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Roberto Basile & Sergio de Nardis & Alessandro Girardi, 2001. "Regional inequalities and cohesion policies in the european union," ISAE Working Papers 23, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
    2. Sjef Ederveen & Henri L.F. de Groot & Richard Nahuis, 2006. "Fertile Soil for Structural Funds?A Panel Data Analysis of the Conditional Effectiveness of European Cohesion Policy," Kyklos, Wiley Blackwell, vol. 59(1), pages 17-42, February.
    3. Philippe Martin, 1997. "Convergence et politiques régionales en Europe," La Lettre du CEPII, CEPII research center, issue 159.
    4. anonymous, 1997. "European Monetary Union faces tough decisions," Economics Update, Federal Reserve Bank of Atlanta, issue Oct, pages 1-5.
    5. repec:hal:spmain:info:hdl:2441/9365 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cristian PAUN, 2015. "The Role of European Union Funds in Economic Development," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 3(3), pages 463-481, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Forte, Francesco & Magazzino, Cosimo & Mantovani, Michela, 2010. "On the failure of European planning for less developed regions. The case of Calabria," MPRA Paper 25527, University Library of Munich, Germany.
    2. Aiello, Francesco & Pupo, Valeria, 2012. "Structural funds and the economic divide in Italy," Journal of Policy Modeling, Elsevier, vol. 34(3), pages 403-418.
    3. Sarantis Lolos, 2009. "The effect of EU structural funds on regional growth: assessing the evidence from Greece, 1990–2005," Economic Change and Restructuring, Springer, vol. 42(3), pages 211-228, August.
    4. Enrico Fabrizi & Gianni Guastella & Stefano Marta & Francesco Timpano, 2016. "Determinants of Intra-Distribution Dynamics in European Regions: An Empirical Assessment of the Role of Structural Intervention," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 107(5), pages 522-539, December.
    5. Florence Bouvet, 2010. "EMU and the dynamics of regional per capita income inequality in Europe," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(3), pages 323-344, September.
    6. Tiberiu Brailean & Aurelian-Petru? Plopeanu, 2014. "The Remoralization of Capitalism," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 1(1), pages 160-170, February.
    7. Martina Vukašina & Ines Kersan-Škabiæ & Edvard Orliæ, 2022. "Impact of European structural and investment funds absorption on the regional development in the EU–12 (new member states)," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(4), pages 857-880, December.
    8. Asteris Huliaras & Sotiris Petropoulos, 2016. "European Money in Greece: In Search of the Real Impact of EU Structural Funds," Journal of Common Market Studies, Wiley Blackwell, vol. 54(6), pages 1332-1349, November.
    9. Théophile T. Azomahou & Jalal El Ouardighi & Phu Nguyen Van & Thi Kim Cuong Pham, 2006. "Estimation semi-paramétrique de la convergence des régions européennes," Economie & Prévision, La Documentation Française, vol. 0(2), pages 97-110.
    10. Maria Coelho, 2019. "Fiscal Stimulus in a Monetary Union: Evidence from Eurozone Regions," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 67(3), pages 573-617, September.
    11. Hans Pitlik & Michael Klien & Stefan Schiman, 2017. "Stabilitätskonforme Berücksichtigung nachhaltiger öffentlicher Investitionen," WIFO Studies, WIFO, number 60595.
    12. Gruševaja, Marina & Pusch, Toralf, 2011. "How does Institutional Setting Affect the Impact of EU Structural Funds on Economic Cohesion? New Evidence from Central and Eastern Europe," IWH Discussion Papers 17/2011, Halle Institute for Economic Research (IWH).
    13. Sandy Dall'erba & Julie Le Gallo, 2008. "Regional convergence and the impact of European structural funds over 1989–1999: A spatial econometric analysis," Papers in Regional Science, Wiley Blackwell, vol. 87(2), pages 219-244, June.
    14. Iain Begg, 2008. "Structural policy and economic convergence," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(01), pages 3-9, April.
    15. Andrés Maroto Sánchez & Juan Ramón Cuadrado Roura, 2008. "New Regional convergence in productivity and productive structure. Application to European Southern countries," Working Papers 11/08, Instituto Universitario de Análisis Económico y Social.
    16. Muinelo-Gallo, Leonel, 2022. "Business cycles and redistribution: The role of government quality," Economic Systems, Elsevier, vol. 46(4).
    17. Filip Hruza & Stanislav Volcík & Jan Žácek, 2019. "The Impact of EU Funds on Regional Economic Growth of the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 69(1), pages 76-94, February.
    18. Rodríguez-Pose, Andrés & Ketterer, Tobias, 2016. "Institutions vs. ‘First-Nature’ Geography – What Drives Economic Growth in Europe’s Regions?," CEPR Discussion Papers 11322, C.E.P.R. Discussion Papers.
    19. Andreas P Kyriacou & Oriol Roca-Sagalés, 2012. "The Impact of EU Structural Funds on Regional Disparities within Member States," Environment and Planning C, , vol. 30(2), pages 267-281, April.
    20. José Luis Navarro-Espigares & José Aureliano Martín-Segura, 2010. "Public--private partnership and regional productivity in the UK," The Service Industries Journal, Taylor & Francis Journals, vol. 31(4), pages 559-580, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rau:rseijr:v:1:y:2015:i:2:p:50-73. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alex Tabusca (email available below). General contact details of provider: https://edirc.repec.org/data/frrauro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.