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Euro area structural convergence? A multi-criterion cluster analysis

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  • Delphine Irac
  • Jimmy Lopez

Abstract

This paper proposes a classification of the old member countries of the euro area in a structural data rich environment and run a convergence analysis using the same framework. First, we use a clustering approach and identify two structurally distinct clusters of countries that are not modified between 1999 and 2012: the South Countries Group (SCG) – composed of Greece, Italy, Portugal and Spain – and the Other Countries Group (OCG). Second, we propose a convergence metrics and reach three key findings: (i) increase over time of the between-clusters? dispersion; (ii) diverging demographics and innovation performance into the OCG, and (iii) an unfortunate convergence towards high labour market duality in the SCG.

Suggested Citation

  • Delphine Irac & Jimmy Lopez, 2015. "Euro area structural convergence? A multi-criterion cluster analysis," International Economics, CEPII research center, issue 143, pages 1-22.
    • Handle: RePEc:cii:cepiie:2015-q3-143-1
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    2. Iustina Alina Boitan & Ewa Wanda Maruszewska, 2021. "Corporate governance features among European Union countries – an exploratory analysis," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 13(1), pages 79-91, June.
    3. repec:ecb:ecbops:2014165 is not listed on IDEAS
    4. Philip Haynes & Jonathan Haynes, 2016. "Convergence and Heterogeneity in Euro Based Economies: Stability and Dynamics," Economies, MDPI, vol. 4(3), pages 1-16, August.
    5. Iustina Alina Boitan & Kamilla Marchewka-Bartkowiak, 2021. "The Sovereign-Bank Nexus in the Face of the COVID-19 Pandemic Outbreak—Evidence from EU Member States," Risks, MDPI, vol. 9(5), pages 1-21, May.
    6. Iustina Alina Boitan & Emilia Mioara Campeanu & Sanja Sever Malis, 2021. "Economic Sentiment Perceptions During COVID-19 Pandemic – A European Cross-Country Impact Assessment," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 23(Special15), pages 982-982, November.
    7. Katerina Arnostova & Oxana Babecka Kucharcukova & Jan Babecky & Marek Benda & Sona Benecka & Jan Bruha & Kamil Galuscak & Jakub Grossmann & Eva Hromadkova & Lubos Komarek & Zlatuse Komarkova & Jan Kra, 2023. "Analyses of the Czech Republic's Current Economic Alignment with the Euro Area 2022," Occasional Publications - Edited Volumes, Czech National Bank, number as23 edited by Katerina Arnostova & Vojtech Molnar, January.
    8. Tomas Adam & Oxana Babecka Kucharcukova & Jan Babecky & Vojtech Belling & Sona Benecka & Jan Bruha & Kamil Galuscak & Tomas Holub & Eva Hromadkova & Lubos Komarek & Zlatuse Komarkova & Kamila Kulhava , 2015. "Analyses of the Czech Republic's Current Economic Alignment with the Euro Area 2015," Occasional Publications - Edited Volumes, Czech National Bank, number as15 edited by Kamila Kulhava & Lucie Matejkova, January.

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    More about this item

    Keywords

    Cluster analysis; European monetary union; Structural policies;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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