Real convergence in Europe: A cluster analysis

Mercedes Monfort, Juan Cuestas and Javier Ordóñez

Economic Modelling, 2013, vol. 33, issue C, 689-694

Abstract: In this paper we analyse real convergence in GDP per worker in the EU member states. The aim is to test whether there is evidence of club convergence in the EU, i.e. divergence in GDP per worker. Evidence in favour of cluster or club convergence may be an indication of significant productivity divergences between countries, which may also explain the current turmoil in the euro zone. The results show evidence of different economic growth rates within Europe, which also converge to different steady states, implying divergence in the EU-14. Within the EU-14 member states we observe two convergence clubs, which are not related to the fact that some countries belong to the euro area. Furthermore, Eastern European countries are also divided in two clubs, with a more direct effect of belonging to the euro zone in the composition of the clubs.

Keywords: Cluster; Real convergence; Economic integration; Euro (search for similar items in EconPapers)
JEL-codes: C32 C33 O47 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (86)

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Working Paper: Real Convergence in Europe: A Cluster Analysis (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:33:y:2013:i:c:p:689-694

DOI: 10.1016/j.econmod.2013.05.015

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