REGIONAL COOPERATION AND ECONOMIC INTEGRATION

Ilona Cserháti, PhD
Senior Research Fellow,
Head of the Department for
Macroeconomic analysis and Modelling
Tibor Keresztély
Research Fellow, ECOSTAT
Lecturer, Corvinus University of Budapest
Zsuzsa Varga
Research Fellow
REGIONAL TRADE AGREEMENTS AND REGIONAL COOPERATION
ANALYSIS OF THE MACROECONOMIC EFFECTS OF THE
EUROPEAN INTEGRATION AND THE EU-TRANSFERS
Abstract
A macroeconomic model suitable for both mid- and long-term forecasts and scenario
analysis, can be a useful decision making tool for the economic policy. Several modelling
methods and other techniques were published which can be useful to estimate the impact
of the integration and the EU transfers. The HERMIN model family was developed
especially for the new members of the EU and the candidate countries. These models
focus on the macroeconomic effects of the accession and the financial support received
from Brussels. We have developed in our institute (ECOSTAT) the so-called ECO-TREND
calibrated model for analyzing the Hungarian economy using the modelling experiences
of the HERMIN models. The assessment of the model parameters has been either based on
standard statistical methods, or on experts’ estimations. Our modelling experiences could
be useful for the countries of the Balkan region in order to create their own HERMIN
type models. In the last section of the paper forecasts are presented until 2020 completed
by the analysis of three different macroeconomic scenarios based on different drawing
rate and structure of expenses of EU transfers, which play a significant role in the longterm
convergence of Hungarian economy. The paper presents several channels through the
transfers can be effective.
Key words: European integration, EU transfers, macroeconomic modelling, HERMIN
models, scenario analysis, long-term model
INTRODUCTION
It is important to take in consideration what role the European integration and the EUtransfers
in the convergence process play in the new EU member states and the Balkan
countries. Several modelling methods and other techniques were published which can be
useful to estimate the impact of these two mentioned factors. The HERMIN model family
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