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Within Economic Blocks, Countries And States Tend To Diverge (Not Converge)

Author

Listed:
  • Jorge SÁ
  • Ana Lúcia LUÍS

Abstract

There is considerable literature which indicates as one of the advantages of economic blocks the trend towards convergence among their members. The expectation is that within economic unions, there is not only a general increase in welfare, but also economic convergence, greater income similarity among its members: since it is far easier to copy than to innovate, the dissemination of innovations would create similar standards among all within an economic block. This article presents empirical evidence for the opposite: within economic blocks, be they EU countries or federal states of the USA, they tend to diverge, not converge.

Suggested Citation

  • Jorge SÁ & Ana Lúcia LUÍS, 2022. "Within Economic Blocks, Countries And States Tend To Diverge (Not Converge)," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 22(2), pages 37-44.
    • Handle: RePEc:eaa:eerese:v:22:y2022:i:2_2
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    File URL: http://www.usc.es/~economet/reviews/eers2222.pdf
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    References listed on IDEAS

    as
    1. Linda Glawe & Helmut Wagner, 2021. "Divergence Tendencies in the European Integration Process: A Danger for the Sustainability of the E(M)U?," JRFM, MDPI, vol. 14(3), pages 1-22, March.
    2. Monge-Naranjo, Alexander, 2020. "A Theory of Economic Unions: A Comment," Journal of Monetary Economics, Elsevier, vol. 109(C), pages 128-132.
    3. Gancia, Gino & Ponzetto, Giacomo A.M. & Ventura, Jaume, 2020. "A theory of economic unions," Journal of Monetary Economics, Elsevier, vol. 109(C), pages 107-127.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Economic blocks; European Union; USA; convergence; divergence.;
    All these keywords.

    JEL classification:

    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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