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The Impact of EU Cohesion Funds on Macroeconomic Developments in the Visegrád Countries After the 2008–2009 Financial Crisis

In: Does EU Membership Facilitate Convergence? The Experience of the EU's Eastern Enlargement - Volume II

Author

Listed:
  • Adam Czelleng

    (GKI Economic Research)

  • Andras Vertes

    (GKI Economic Research)

Abstract

This chapter investigates how cohesion funds were spent and how these funds impacted economic developments in the Visegrád countries (Czechia, Hungary, Poland, Slovakia) on short, medium and long terms. Czechia has been the most developed country in the region, Poland and Slovakia were dynamically converging to the European average while the latter also joined the euro-zone and Hungary has significantly improved its external and internal imbalances. The analysis shows that the sizable spending from cohesion funds had a major impact on growth, investment, external and fiscal conditions. Cohesion funds generally have their primary economic impact throughout investments (both public and private). Funds aim to increase the country’s growth potential in the long run. Spending on competitiveness (R&D, education, health, etc.) might have smaller impact on short term but can have significant long-term effect because it provides more attractive conditions for private investments. While on the other hand, financing private projects can generate significant impact on the short term but the additional impact dissipates quickly. The increased growth potential can generate additional tax revenues in the long term.

Suggested Citation

  • Adam Czelleng & Andras Vertes, 2021. "The Impact of EU Cohesion Funds on Macroeconomic Developments in the Visegrád Countries After the 2008–2009 Financial Crisis," Studies in Economic Transition, in: Michael Landesmann & István P. Székely (ed.), Does EU Membership Facilitate Convergence? The Experience of the EU's Eastern Enlargement - Volume II, chapter 0, pages 67-87, Palgrave Macmillan.
    • Handle: RePEc:pal:stuchp:978-3-030-57702-5_4
    DOI: 10.1007/978-3-030-57702-5_4
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    More about this item

    Keywords

    EU funds; Visegrád countries; Impact assessment; DSGE;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other

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