Convergence in the Core Euro Zone under the Global Financial Crisis

Kang-Soek Lee () and Franceline Mercurelli ()
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Kang-Soek Lee: Novancia Business School, Postal: Novancia Business School, Paris Chamber of Commerce and Industry, 3 Rue Armand Moisant,, 75015 Paris, France
Franceline Mercurelli: University of Orléans, Postal: Laboratoire d’Economie d’Orléans–UMR7322, University of Orléans, Rue de Blois – BP 26739,, 45067 Orléans Cedex 2, France

Journal of Economic Integration, 2014, vol. 29, 20-63

Abstract: A lack of economic convergence among euro member countries seems to be feeding euro-skepticism. Using a Structural Vector Auto Regression model combined with a time varying correlation analysis, we attempt to test the endogeneity theory for the three core euro members, i.e., France, Germany, and Italy. We provide evidence that the adoption of the euro has increased the symmetry of underlying shocks and accelerated the convergence process within this group. Even though the global crisis of 2007~2009 disturbed the European convergence process, the expected endogeneity effects continue to be generated, and the euro-skepticism is not corroborated.

Keywords: Endogeneity Effect; Convergence; Euro; Structural VAR; Dynamic Correlation (search for similar items in EconPapers)
JEL-codes: C32 E42 F44 O52 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0621

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