Real Convergence in Malta and in the EU Countries after the Financial Crisis

Brian Micallef ()
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Brian Micallef: Central Bank of Malta, Malta, Postal: Manager, Research Department, Central Bank of Malta, Castille Place, Valletta, VLT1060, Malta,

Journal of Economic Integration, 2020, vol. 35, issue 2, 215-239

Abstract: Strong economic growth after the 2008-2009 financial crisis led to a rapid rate of real convergence in Malta. This article compares Malta’s real convergence process with that of other EU27 economies post-financial crisis. A growth accounting framework is used to decompose the sources of growth and convergence from a supply-side perspective. The EU evidence of convergence is mixed. Malta’s convergence since 2010 was driven by a higher utilization of labor. The cross-country comparison identifies three important lessons for a country’s convergence process: one, the perils associated with rapid growth driven by the accumulation of imbalances; two, the need for a flexible adjustment process following an economic shock; and three, EU and euro area memberships are no panacea for real convergence, without institutions that are conducive to technological adoption and productivity growth.

Keywords: Real Convergence; Labor Productivity; Labor Utilization; Malta EU (search for similar items in EconPapers)
JEL-codes: E24 O40 O47 O52 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0797

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