Analysing Convergence in Europe Using a Non-linear Single Factor Model
Ulrich Fritsche () and
Vladimir Kuzin ()
Additional contact information
Vladimir Kuzin: German Institute for Economic Research (DIW) Berlin
No 200802, Macroeconomics and Finance Series from Hamburg University, Department Wirtschaft und Politik
We investigate convergence in European price level, unit labor cost, income, and productivity data over the period of 1960-2006 using the non-linear time-varying coefficients factor model proposed by Phillips and Sul (2007). This approach is extremely flexible on order to model a large number of transition paths to convergence. We find regional clusters in consumer price level data. GDP deflator data and unit labor cost data are far less clustered than CPI data. Income per capita data indicate the existence of three convergence clubs without strong regional linkages; Italy and Germany are not converging to any of those clubs. Total factor productivity data indicate the existence of a small club including fast-growing countries and a club consisting of all other countries.
Keywords: Price level; Income; Productivity; Convergence; Factor Model; European Monetary Union (search for similar items in EconPapers)
JEL-codes: E31 O47 C32 C33 E37 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-eff, nep-geo and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (6) Track citations by RSS feed
Downloads: (external link)
http://www.wiso.uni-hamburg.de/repec/hepdoc/macppr_2_2008.pdf First version, 2008 (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: /RePEc:hep:macppr:200802
Access Statistics for this paper
More papers in Macroeconomics and Finance Series from Hamburg University, Department Wirtschaft und Politik
Contact information at EDIRC.
Series data maintained by Ulrich Fritsche ().