The effects of US economic and financial crises on euro area convergence

Fabio Bagliano and Claudio Morana

No 99, CeRP Working Papers from Center for Research on Pensions and Welfare Policies, Turin (Italy)

Abstract: As economic and financial integration between the US and the euro area is strong, assessing whether the recent US crisis may affect the process of real and nominal convergence within the euro area is important. The paper addresses this issue in the framework of a large-scale open economy macroeconometric model, featuring 14 euro area member countries, the USA, and 35 advanced and emerging economies. The results point to a likely contribution of US economic and financial crises to real divergence in the euro area, potentially affecting first, second and third moments of the output growth distribution; on the other hand, implications for nominal convergence are less clear-cut.

Keywords: Euro area convergence; Great Recession; financial crisis; economic crisis; factor vector autoregressive models (search for similar items in EconPapers)
JEL-codes: C22 E32 F36 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2010-09
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Citations: View citations in EconPapers (2)

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Related works:
Chapter: The Effects of the US Economic and Financial Crises on Euro Area Convergence (2011)
Working Paper: The effects of US economic and financial crises on euro area convergence (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:crp:wpaper:99

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