Convergence and Cluster Structures in EU Area according to Fluctuations in Macroeconomic Indices

Mircea Gligor () and Marcel Ausloos
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Mircea Gligor: University of Liege, Postal: National College “Roman Voda”, Str M. Eminescu 3, Roman-5550, Neamt, Romania, GRAPES, B5, Sart Tilman, University of Liege, Belgium, Euroland

Journal of Economic Integration, 2008, vol. 23, 297-330

Abstract:

Cluster analysis methods allow for a comparative study of countries through basic macroeconomic indicator fluctuations. Statistical distances between 15 EU countries are first calculated for various moving time windows. The decrease in time of the mean statistical distance is observed through the correlated fluctuations of typical macroeconomic indicators: GDP, GDP/capita, Consumption and Investments. This empirical evidence can be seen as a mark of globalization. The Moving Average Minimal Length Path algorithm indicates the existence of cluster-like structures both in the hierarchical organization of countries and their relative movements inside the hierarchy. The most strongly correlated countries with respect to GDP fluctuations can be partitioned into stable clusters. Several so correlated countries display strong correlations also in the Final Consumption Expenditure; others are strongly correlated in the Gross Capital Formation. The similarity between the classifications due to GDP and Net Exports fluctuations is pointed out through the squared sum of the correlation coefficients, a so called “country sensitivity”. The structures are robust against changes in time window size. Policy implications concern the economic clusters arising in the presence of Marshallian externalities and the relationships between trade barriers, R&D incentives and growth that must be accounted for in elaborating cluster-promotion policies.

Keywords: Statistical distances; Minimal length path; Convergence; Clusteri (search for similar items in EconPapers)
JEL-codes: C10 C22 C23 O52 O57 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (18)

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Working Paper: Convergence and cluster structures in EU area according to fluctuations in macroeconomic indices (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0435

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