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Economic convergence in the EU and Eurozone

Author

Listed:
  • Enrico Piero Marelli
  • Maria Laura Parisi
  • Marcello Signorelli

Abstract

Purpose - The purpose of this paper is to analyse whether several groups of European countries are on track for real “conditional” economic convergence in per capita income and the likely speed of convergence. The paper focusses also on the changes of the convergence processes over time. Design/methodology/approach - Unlike the simple “absolute convergence”, it explores the concept of “conditional” or “club” convergence. Moreover, it adopts the approach of extending the univariate model to take into account the panel dimension over an extended time interval and endogeneity. Findings - A process of real economic convergence has characterised the period under investigation (1995–2016), but, in general, the size and significance of the parameter is greater for the wide European Union (EU) area (EU25 and above) rather than the Eurozone (EZ). However, the crises occurred after 2008 caused most of such lower convergence in the Euro area. Research limitations/implications - This paper gives an estimate of the speed/time needed to several groups of European countries (EZ, in particular) to achieve real economic convergence. Future research could further develop the “stochastic” convergence concept. Originality/value - This is an analysis of convergence in enlarging EU and EZ for an extended period (including the big crisis period and the subsequent recovery). It shows that EZ experienced a drop in the speed of real convergence after 2008 and converge at lower speed than the EU. As a consequence, a specific budget for EZ would be important to provide adjustment mechanisms after potentially large shocks.

Suggested Citation

  • Enrico Piero Marelli & Maria Laura Parisi & Marcello Signorelli, 2019. "Economic convergence in the EU and Eurozone," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(7), pages 1332-1344, November.
    • Handle: RePEc:eme:jespps:jes-03-2019-0139
    DOI: 10.1108/JES-03-2019-0139
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    Citations

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    Cited by:

    1. Malliaris, Anastasios G. & Malliaris, Mary, 2020. "The impact of the twin financial crises," Journal of Policy Modeling, Elsevier, vol. 42(4), pages 878-892.
    2. William Miles, 2021. "Convergence in the Eurozone: Progress Towards the Goal?," Economic Papers, The Economic Society of Australia, vol. 40(2), pages 116-133, June.
    3. Dzenita Siljak & Sandor Gyula Nagy, 2021. "The Effects of the Crisis on Convergence between the Eastern Partnership and EU-15 States," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 3-18.
    4. Cosimo Magazzino & Marco Mele, 2022. "A Dynamic Factor and Neural Networks Analysis of the Co-movement of Public Revenues in the EMU," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 8(2), pages 289-338, July.
    5. Ana-Maria Holobiuc, 2020. "Real Convergence in the European Union: An Empirical Approach," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 126-133, December.
    6. Simona Andreea Apostu & Mirela Panait & Daniel Balsalobre-Lorente & Diogo Ferraz & Irina Gabriela Rădulescu, 2022. "Energy Transition in Non-Euro Countries from Central and Eastern Europe: Evidence from Panel Vector Error Correction Model," Energies, MDPI, vol. 15(23), pages 1-21, December.

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