European Cohesion Policy to the Rescue? Revising (Counter)-Cyclical Effects in the EU-28 Recipient Countries
European Cohesion Policy to the Rescue? Revising (Counter)-Cyclical Effects in the EU-28 Recipient Countries
Author(s): Ľubica ŠtiblárováSubject(s): Supranational / Global Economy, Governance, Economic development, EU-Accession / EU-DEvelopment
Published by: Ekonomický ústav SAV a Prognostický ústav SAV
Keywords: allocation; European Cohesion Policy; cyclicality; system gmm estimation;
Summary/Abstract: This paper empirically verifies recent efforts of EU policymakers and government authorities to apply the European Cohesion Policy (ECP) as a possible counter-cyclical instrument to boost economies in their economic downturns. Compared to limited country-specific studies, we allow for an endogeneity issue between the business cycles and the ECP payments and apply a system GMM estimation for the EU-28 recipient countries sample in the time period 2000 – 2018. Even though the overall ECP payments follow a pro-cyclical path, the model estimations for the sub-periods based on individual programming periods reveal a time-varying cyclical character of the ECP. Whereas the observed procyclicality can be mainly contributed to the period 2000 – 2006, we find the conditional counter-cyclical effects in 2007 – 2013 and 2014 – 2018, when a lower price level and obeying the rule of law seem to have an extra counter-cyclical dimension, confirming a rationale of the convergence criteria and the Stability and the Growth Pact.
Journal: Ekonomický časopis
- Issue Year: 70/2022
- Issue No: 09-10
- Page Range: 681-702
- Page Count: 22
- Language: English