The above graph shows the actual GDP evolution for the UK and Spain in comparison to a simulated evolution of their GDP had they not joined the EU. The black line, therefore, is the predicted evolution of the GDP in the case those countries had not joined the EU.Looking at the graph (“Figure 7.2”), would you say that belonging to the EU was on average a positive experience? Explain your answer. Why would you find citizens in both countries that would differ in their sentiment towards the benefits of belonging to the EU? Relate the above graph (“Figure 7.2”) to the theoretical objective of convergence across regions in the EU using the structural funds. Figure 7.2 Empirical evidence on the medium-run growth effectUK income gain from Europeanintegration40,00035,00030,00025,000-20,00015,000 -10,0005,000-Actual GDP per capitaSynthetic GDP per capita19551959196319671971-197519791983-1987-1991-199519992003200735,00030,00025,000-20,00015,00010,0005,000Spanish income gain fromEuropean integrationActual GDP per capita- Synthetic GDP per capita19701973-1976-19791982-1985-19881991199419972000-20032006-Note: Measured in US international dollars in purchasing power terms, see text for explanation of 'synthetic'.Source: Authors' elaboration of data from 2018 research by Nauro Campos, Fabrizio Coricelli and Luigi Moretti, used with permission.

As we are about to discuss the effects of being an EU member, let it be clear that the joining time…

Answered: Looking at the graph (“Figure 7.2”),…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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The above graph shows the actual GDP evolution for the UK and Spain in comparison to a simulated evolution of their GDP had they not joined the EU. The black line, therefore, is the predicted evolution of the GDP in the case those countries had not joined the EU.

Looking at the graph (“Figure 7.2”), would you say that belonging to the EU was on average a positive experience? Explain your answer.
Why would you find citizens in both countries that would differ in their sentiment towards the benefits of belonging to the EU?
Relate the above graph (“Figure 7.2”) to the theoretical objective of convergence across regions in the EU using the structural funds.

Figure 7.2 Empirical evidence on the medium-run growth effect
UK income gain from European
integration
40,000
35,000
30,000
25,000-
20,000
15,000 -
10,000
5,000-
Actual GDP per capita
Synthetic GDP per capita
1955
1959
1963
1967
1971-
1975
1979
1983-
1987-
1991-
1995
1999
2003
2007
35,000
30,000
25,000-
20,000
15,000
10,000
5,000
Spanish income gain from
European integration
Actual GDP per capita
- Synthetic GDP per capita
1970
1973-
1976-
1979
1982-
1985-
1988
1991
1994
1997
2000-
2003
2006-
Note: Measured in US international dollars in purchasing power terms, see text for explanation of 'synthetic'.
Source: Authors' elaboration of data from 2018 research by Nauro Campos, Fabrizio Coricelli and Luigi Moretti, used with permission.

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