European Union and the Solow model: Empirical contribution to theories of economic growth

The following article deals with the basic Solow model of economic growth for the states of the EU-28 and empirically confirms its conclusions. Based on growth accounting, and by analyzing different determinants of the respective steady states of each country, we confirm the importance of capital accumulation. Moreover, the model confirms the existence of both, the absolute and conditional convergence, due to the relative homogeneity of the EU-28. Furthermore, the model developed implies values of the speed of convergence corresponding to the reality observed. Lastly, the model confirms that the Eastern Enlargement represented an acceleration in absolute convergence.