WITHIN ECONOMIC BLOCKS, COUNTRIES AND STATES TEND TO DIVERGE (NOT CONVERGE)

Jorge Sá and Ana Lúcia Luís

Regional and Sectoral Economic Studies, 2022, vol. 22, issue 2, 37-44

Abstract: There is considerable literature which indicates as one of the advantages of economic blocks the trend towards convergence among their members. The expectation is that within economic unions, there is not only a general increase in welfare, but also economic convergence, greater income similarity among its members: since it is far easier to copy than to innovate, the dissemination of innovations would create similar standards among all within an economic block. This article presents empirical evidence for the opposite: within economic blocks, be they EU countries or federal states of the USA, they tend to diverge, not converge.

Keywords: Economic blocks; European Union; USA; convergence; divergence. (search for similar items in EconPapers)
JEL-codes: O51 O52 (search for similar items in EconPapers)
Date: 2022
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