The Eurozone Convergence through Crises and Structural Changes
Remzi Uctum () and
Chu-Ping C. Vijverberg
No 2017-38, EconomiX Working Papers from University of Paris Nanterre, EconomiX
In light of several economic and financial crises and institutional changes experienced by the Eurozone countries, we examine whether the adoption of the euro led to business cycle synchronization or fostered convergence of growth rates. Controlling for reverse causality, we conduct multiple endogenous break tests and find that while output growth was synchronized for some countries, convergence occurred in a nonlinear way for others: (i) convergence was not triggered by adoption of the euro but by international or idiosyncratic shocks; (ii) in several countries convergence started long before the introduction of the euro, accelerated during the 1990s and continued since then, reflecting persistent influence of the core countries; (iii) convergence has been prevalent among the non-Eurozone economies in our sample.
Keywords: Convergence; business cycle synchronization; euro; crises; structural breaks. (search for similar items in EconPapers)
JEL-codes: E3 F4 F6 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-mac and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2017-38
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