Capital Markets Integration and Economic Growth in the European Union

Document Type

Peer-Reviewed Article

Publication Date

7-2020

Abstract

This paper argues that a deeper integration of capital markets in the European Union is necessary to support accelerated economic growth. Further integrated equity and bond markets will provide access to capital funding improve the allocation of capital, help mitigate market and systemic risks, and ultimately foster a counter-cyclical, sustained real economy growth. The paper provides evidence that the increases in both total portfolio equity and debt to GDP ratios in the euro area actively contribute to real GDP growth.

Comments

Available online 15 April 2020.

JEL Classification: E44, F36, F45.

DOI

10.1016/j.jpolmod.2020.03.012

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