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Is productivity diverging in the EU? Evidence from 11 Member States

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  • Grigorios Emvalomatis

    (University of Dundee)

Abstract

An argument that received a lot of attention in the political and economic discussion surrounding the recent crisis in the EU is that diverging trends in productivity across member countries will undermine the viability of the common currency. This article examines the issue of convergence in multifactor productivity using sector-level data from 11 EU Member States. A state-space model is developed, and formal Bayesian model comparisons are performed to infer whether productivity is diverging, both at the aggregate level and at a sector-by-sector basis. The data point toward diverging productivity at the aggregate level, but suggest the opposite for many individual sectors.

Suggested Citation

  • Grigorios Emvalomatis, 2017. "Is productivity diverging in the EU? Evidence from 11 Member States," Empirical Economics, Springer, vol. 53(3), pages 1171-1192, November.
    • Handle: RePEc:spr:empeco:v:53:y:2017:i:3:d:10.1007_s00181-016-1161-x
    DOI: 10.1007/s00181-016-1161-x
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    2. Berislav Žmuk & Ksenija Dumièiæ & Irena Paliæ, 2018. "Forecasting Labour Productivity in the European Union Member States: Is Labour Productivity Changing as Expected?," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 16(3-B), pages 504-523.
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