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Real convergence in Europe: A cluster analysis

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  • Monfort, Mercedes
  • Cuestas, Juan Carlos
  • Ordóñez, Javier

Abstract

In this paper we analyse real convergence in GDP per worker in the EU member states. The aim is to test whether there is evidence of club convergence in the EU, i.e. divergence in GDP per worker. Evidence in favour of cluster or club convergence may be an indication of significant productivity divergences between countries, which may also explain the current turmoil in the euro zone. The results show evidence of different economic growth rates within Europe, which also converge to different steady states, implying divergence in the EU-14. Within the EU-14 member states we observe two convergence clubs, which are not related to the fact that some countries belong to the euro area. Furthermore, Eastern European countries are also divided in two clubs, with a more direct effect of belonging to the euro zone in the composition of the clubs.

Suggested Citation

  • Monfort, Mercedes & Cuestas, Juan Carlos & Ordóñez, Javier, 2013. "Real convergence in Europe: A cluster analysis," Economic Modelling, Elsevier, vol. 33(C), pages 689-694.
  • Handle: RePEc:eee:ecmode:v:33:y:2013:i:c:p:689-694
    DOI: 10.1016/j.econmod.2013.05.015
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    2. repec:sgh:annals:i:47:y:2017:p:27-42 is not listed on IDEAS
    3. Konrad Lyncker & Rasmus Thoennessen, 2017. "Regional club convergence in the EU: evidence from a panel data analysis," Empirical Economics, Springer, vol. 52(2), pages 525-553, March.
    4. Javier Ordóñez & Hector Sala & José Silva, 2015. "Real unit labour costs in Eurozone countries: drivers and clusters," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-19, December.
    5. Svatopluk Kapounek & Zuzana Kucerova, 2018. "Historical Decoupling in the EU: Evidence from Time-Frequency Analysis," MENDELU Working Papers in Business and Economics 2018-75, Mendel University in Brno, Faculty of Business and Economics.
    6. M. Karagoz, 2016. "Comparative performances of EU-15 and Turkey: a PIN analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 23(1), pages 19-22, January.
    7. Mirdala, Rajmund & Ruščáková, Anna, 2015. "On Origins and Implications of the Sovereign Debt Crisis in the Euro Area," MPRA Paper 68859, University Library of Munich, Germany.
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    10. Ryszard Rapacki & Mariusz Próchniak, 2014. "The Impact of EU Membership on Economic Growth and Real Convergence of the Central and Eastern European Countries," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 39.
    11. repec:cpn:umkdem:v:17:y:2017:p:59-80 is not listed on IDEAS
    12. Niţoi, Mihai & Pochea, Maria Miruna, 2016. "Testing financial markets convergence in Central and Eastern Europe: A non-linear single factor model," Economic Systems, Elsevier, vol. 40(2), pages 323-334.
    13. Mihaela Simionescu, 2014. "Testing the Convergence Hypothesis in the European Union," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 2(1), pages 222-229, May.
    14. Mercedes Monfort & Javier Ordóñez & Hector Sala, 2018. "Inequality and Unemployment Patterns in Europe: Does Integration Lead to (Real) Convergence?," Open Economies Review, Springer, vol. 29(4), pages 703-724, September.
    15. Mădălina AVRAM & Constantin POSTOIU, 2016. "Territorial patterns of development in the European Union," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(606), S), pages 77-88, Spring.
    16. repec:vls:rojfme:v:4:y:2017:i:1:p:11-17 is not listed on IDEAS
    17. Matkowski, Zbigniew & Prochniak, Mariusz & Rapacki, Ryszard, 2016. "Real Income Convergence between Central Eastern and Western Europe: Past, Present, and Prospects," EconStor Conference Papers 146992, ZBW - German National Library of Economics.
    18. Jorge M. L. G. Andraz & Paulo M.M. Rodrigues, 2015. "A Reappraisal of Eurozone Countries Output Differentials," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    19. repec:krk:eberjl:v:5:y:2017:i:4:p:189-204 is not listed on IDEAS

    More about this item

    Keywords

    Cluster; Real convergence; Economic integration; Euro;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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