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The Role of Maastricht Criteria and Membership in Determining Convergence in the Eurozone and ASEAN: A Panel Data Analysis

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Author Info

  • Zaenal Mutaqin

    (Graduate School for International Development and Cooperation, Hiroshima University)

  • Masaru Ichihashi

    (Graduate School for International Development and Cooperation, Hiroshima University)

Abstract

The effectiveness of The Maastricht Treaty (MT) to induce economic convergence in the area was questionable after some Eurozone countries hit by the recent economic crisis. Some studies showed that Maastricht Criteria (MC) as accession criteria for euro membership contributed to low growth in area. It is interesting to analyze the impact of MC and membership on income convergence in the Eurozone and compare it with Association of Southeast Asian Nation (ASEAN). Employing panel analysis, the purpose of this study is to comparatively analyze the income convergence with MC as control variables in the Eurozone and ASEAN during 1990-2009, or just one decade before and after the introduction of Euro coin. The result showed that both the Eurozone and ASEAN were unconditionally and conditionally converged, and also indicated the significance of MC in determining income convergence in both areas. The findings were interesting for policy makers, especially for ASEAN, which was in the process for implementing ASEAN Economic Community (AEC) by 2015.

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File URL: http://ir.lib.hiroshima-u.ac.jp/metadb/up/ZZT00001/IDEC-DP2_02-7.pdf
File Function: First version, 2012
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Bibliographic Info

Paper provided by Hiroshima University, Graduate School for International Development and Cooperation (IDEC) in its series IDEC DP2 Series with number 2-7.

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Length: 13 pages
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:hir:idecdp:2-7

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Web page: http://www.hiroshima-u.ac.jp/en/idec/
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Related research

Keywords: Exports; Convergence; ASEAN; The Eurozone; Maastricht Criteria;

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  1. Bernard, A.B. & Durlauf, S.N., 1994. "Interpreting Tests of the Convergence Hypothesis," Working papers, Wisconsin Madison - Social Systems 9401r, Wisconsin Madison - Social Systems.
  2. M., Azali & Wong, K. S. Kelly & Lee, C. & Shafinaz, Ahmad Nazar, 2007. "The Asean-5 Future Currency: Maastricht Criteria," MPRA Paper 10272, University Library of Munich, Germany.
  3. Kaitila, Ville, 2004. "Integration and Conditional Convergence in the Enlarged EU Area," Discussion Papers, The Research Institute of the Finnish Economy 935, The Research Institute of the Finnish Economy.
  4. Andrea Bassanini & Stefano Scarpetta, 2001. "The Driving Forces of Economic Growth: Panel Data Evidence for the OECD Countries," OECD Economic Studies, OECD Publishing, OECD Publishing, vol. 2001(2), pages 9-56.
  5. Haider, Adnan & Hameed, Shahzad & Wajid, Abdul, 2010. "Income Convergence Hypothesis: A Regional Comparison of selected East and South Asian Economies," MPRA Paper 23739, University Library of Munich, Germany.
  6. Vítor Castro, 2007. "The Impact of the European Union Fiscal Rules on Economic Growth," NIPE Working Papers, NIPE - Universidade do Minho 10/2007, NIPE - Universidade do Minho.
  7. Borut Vojinović & Mariusz Próchniak, 2009. "Divergence Period in the European Convergence Process," Transition Studies Review, Springer, Springer, vol. 15(4), pages 685-700, February.
  8. Slawomir I. BUKOWSKI, 2006. "The Maastricht convergence criteria and economic growth in the EMU," Quaderni del Dipartimento di Economia, Finanza e Statistica, Università di Perugia, Dipartimento Economia, Finanza e Statistica 24/2006, Università di Perugia, Dipartimento Economia, Finanza e Statistica.
  9. Soukiazis, Elias & Castro, Vitor, 2005. "How the Maastricht criteria and the Stability and Growth Pact affected real convergence in the European Union: A panel data analysis," Journal of Policy Modeling, Elsevier, Elsevier, vol. 27(3), pages 385-399, April.
  10. Baldwin, Richard & Forslid, Rikard, 1996. "Trade Liberalization and Endogenous Growth: A q-Theory Approach," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1397, C.E.P.R. Discussion Papers.
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