Europe's income convergence and the latest global financial crisis

Rene Cabral () and Francisco A. Castellanos-Sosa

Research in Economics, 2019, vol. 73, issue 1, 23-34

Abstract: This paper examines the effects of the 2008 financial crisis on economic growth and convergence across European countries from 1973 to 2012. Employing cross-sectional and dynamic panel data techniques, the results show that the global financial crisis has brought a greater absolute convergence rate rather than divergence, affected richer members more heavily and, presumably, allowed less developed members to recover more quickly. We find evidence that creating the European Union has contributed toward economic growth and convergence; meanwhile, no similar evidence is found concerning the European Monetary Union. Moreover, we present evidence that both the average output per capita and the rate of convergence during the financial crisis fell around 7%.

Keywords: Economic growth; Convergence; Financial crisis; European Union; European Monetary Union (search for similar items in EconPapers)
JEL-codes: F33 F43 F45 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:73:y:2019:i:1:p:23-34

DOI: 10.1016/j.rie.2019.01.003

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