An Analysis Based on Hypothesis about the Multiplier Effect of an Adequate Absorption of the EU Funds. The Effects on the Real Convergence in Romania
Author:
Radu SOVIANI, Ph. D. Student
JEL:
C53, E17, E21, E22, E60, F15, F36
DOI:
Keywords:
convergence, EU funds impact, policy mix
Abstract:
In this paper the author tries to identify the effects on the Romanian economy of a proper absorption of the European Funds. The author selects the relevant studies for the macroeconomic impact of the EU funds absorption as it is identified by using the IMF’s GIMF (Global Integrated Monetary and fiscal model) and the EU Quest 3 model, and adjusts the EU model to the economic reality of Romania. The institutional models find that the EU funds need to be directed to investments rather toward consumption. The author takes forward the research and takes into consideration the Romanian economy’s characteristics in order to find a more exact effect on the Romanian economy. Therefore he is developing an analysis based on the hypothesis that Poland’s economy is the best performing state in terms of absorption of EU funds and he develops an adjustment index for the Romanian Economy (based on the particularities of the economy as they were presented in the World Economic Forum Competitiveness Report, Ease of Doing Business - World Bank Report and the Report of Transparency International). The model demonstrates that because of the internal mechanism, Romanian economy is lagging to reach the real EU convergence and the author estimates the monetary dimension of this lag as the difference between a proper EU fund absorption and an inadequate one.\r\n