It is common practice to summarise the economic performance of countries in terms of four dimensions (real growth, inflation, unemployment and the external account), which are visually captured by the magic diamond of the OECD. In this paper we present a synthetic performance measure which merges the four separate indicators into one single statistic. The relative importance of each indicator, representing another macroeconomic objective, may vary across countries and over different subperiods. Therefore we want to construct an indicator which allows unequal weighting of its components, using a data envelopment analysis (DEA)-inspired linear programming model which exhibits ‘benefit of the doubt weighting’. These synthetic macroeconomic performance scores reveal interesting information. They confront measurement with perception. In this paper we use our measure to check empirically whether the strict Maastricht convergence criteria actually have led to a relative economic performance deterioration of the EU-candidates compared to the rest of the world. This viewpoint is often articulated in the theoretical literature. In particular, we investigate the performance of twenty OECD countries, half of which belongs to the EU, in the quinquennial period before and after the Maastricht Treaty.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics in its series Public Economics Working Paper Series with number
ces9822.