Economic recovery and resilience in post-pandemic Europe: evidence from eleven European Union economies

Abstract

This study examines the economic recovery and resilience of eleven European Union member states after the COVID-19 pandemic, using annual data from 1990 to 2022. It applies a multi-method approach, combining the Pooled Mean Group (PMG) estimator, Nonlinear Autoregressive Distributed Lag (NARDL) model, and Common Correlated Effects Estimator to analyze long- and short-run relationships. The findings show that, in the long run, inflation and mobile cellular subscriptions slow growth, while greenhouse gas emissions have a positive effect. Youth unemployment, labor force participation, trade openness, population growth, and foreign direct investment (FDI) do not show significant effects. In the short run, inflation and mobile subscriptions remain negative, while emis sions continue to support growth. PMG results confirm that labor force participation, infla tion, and mobile subscriptions reduce long-term growth, whereas population growth, trade openness, and emissions contribute positively. The NARDL model finds uneven effects of FDI, inflation, population growth, and trade openness, with short-run imbalances in infla tion and trade openness. Causality analysis shows two-way links between inflation, trade openness, youth unemployment, and GDP growth, while one-way effects are observed for greenhouse gas emissions, population growth, and mobile subscriptions. These results help shape post-pandemic economic policies, emphasizing the importance of managing infla tion and improving mobile connectivity to support long-term growth.