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Euro area structural convergence? A multi-criterion cluster analysis


  • Irac, D.
  • Lopez, J.


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 groups of countries that are not modified between 1995 and 2007: 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-group 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

  • Irac, D. & Lopez, J., 2013. "Euro area structural convergence? A multi-criterion cluster analysis," Working papers 470, Banque de France.
  • Handle: RePEc:bfr:banfra:470

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    Cited by:

    1. Dieppe, Alistair & Mourinho Félix, Ricardo & Marchiori, Luca & Grech, Owen & Albani, Maria & Other contributors & Kulikov, Dmitry & Papadopoulou, Niki & Sideris, Dimitris & Irac, Delphine & Gordo Mora, 2015. "Public debt, population ageing and medium-term growth," Occasional Paper Series 165, European Central Bank.
    2. Philip Haynes & Jonathan Haynes, 2016. "Convergence and Heterogeneity in Euro Based Economies: Stability and Dynamics," Economies, MDPI, Open Access Journal, vol. 4(3), pages 1-16, August.
    3. 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, Research Department, number as15 edited by Kamila Kulhava & Lucie Matejkova, June.
    4. repec:ecb:ecbops:2014165 is not listed on IDEAS

    More about this item


    Cluster Analysis; European Monetary Union; Structural Policies.;

    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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