As Europe has continued to deepen economic integration following the end of World War II (having started from trade liberalization within the customs union, deepened into financial integration and eventually moved up to a common currency for euro nations), the European experience provides ample opportunities to investigate the link between the depth of regional integration and long-term growth of member countries. The existing growth theory has identified total factor productivity (TFP) as the key to long-term economic growth. Based on a sample of OECD countries, the effect of different degrees of European integration on TFP will be analyzed by means of panel data methods. The evidence from Europe will be used to derive lessons for ongoing efforts to promote regional integration in Asia.

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