ABSTRACT
From the late 1950s to the mid-1980s the simple Solow-Swan 'exogenous growth model' dominated the literature. S. Folster and M. Henrekson find a robust and negative relationship between government size and economic growth. P. Vanhoudt tests the validity of the neoclassical implication that regional integration has no impact on long-term growth against the alternative model based on endogenous growth theory. As the growth rate is therefore independent of any economic behaviour, economic policy changes will only have a temporary effect on economic activity. If subsamples according to initial income levels can be identified and the coefficient for the years of European Union (EU) membership is significantly higher for initially poorer countries, this would be an indication of increased economic convergence as a consequence of European integration. One interesting question would be whether the results allow implications about the EU enlargement process. EU transfers should be taken into account when analysing the process of convergence.
