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An empirical analysis of the European Union's impact on Spanish economic performance

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  • Catalina Amuedo-Dorantes
  • Mark Wheeler

Abstract

This paper examines the impact that the European Union (EU) has exerted on Spanish economic activity. The empirical analysis is conducted using variance decompositions and historical decompositions derived from a near vector autoregressive (VAR) model. The near VAR includes the exchange rate, the EU's inflation rate and output, and Spain's inflation rate, output, money supply and interest rate. The estimation period begins in 1987, the year after Spain joined the EU, and ends in 1997. The main finding of the analysis is that the EU has significant impacts on the Spanish economy. The paper finds that shocks to EU output explain up to 63% of Spanish output. At longer time horizons, shocks to the EU's inflation rate and output combine to explain over 50% of the forecast error variance in Spanish inflation.

Suggested Citation

  • Catalina Amuedo-Dorantes & Mark Wheeler, 2001. "An empirical analysis of the European Union's impact on Spanish economic performance," Applied Economics, Taylor & Francis Journals, vol. 33(8), pages 1001-1008.
    • Handle: RePEc:taf:applec:v:33:y:2001:i:8:p:1001-1008
    DOI: 10.1080/00036840121830
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    References listed on IDEAS

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    1. Jose Vinals & Juan F. Jimeno, "undated". "Monetary union and european unemployment," Working Papers 96-22, FEDEA.
    2. Weber, Axel A, 1990. "EMU and Asymmetries and Adjustment Problems in the EMS," CEPR Discussion Papers 448, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Rukhsana Rasheed & Mazhr Nadeem Ishaq & Muhammad Imran, 2022. "A Performance Analysis of European Union Integration: The Prospects and Lessons for South Asia," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(1), pages 69-77, March.
    2. Costa-i-Font, Joan, 2010. "Regional single currency effects on bilateral trade with the European Union," LSE Research Online Documents on Economics 53292, London School of Economics and Political Science, LSE Library.
    3. Joan Costa-i-Font, 2010. "Regional Single Currency Effects on Bilateral Trade with the European Union," LEQS – LSE 'Europe in Question' Discussion Paper Series 26, European Institute, LSE.
    4. Lucian Liviu ALBU & Carlos MatéJIMÉNEZ & Mihaela SIMIONESCU, 2015. "The Assessment of Some Macroeconomic Forecasts for Spain using Aggregated Accuracy Indicators," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 30-47, June.
    5. Joan Costa-i-Font, 2010. "Regional Single Currency Effects on Bilateral Trade with the European Union," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 6, London School of Economics / European Institute.

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