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Euro area structural convergence? A multi-criterion cluster analysis

Listed author(s):
  • 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.

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File URL: https://publications.banque-france.fr/sites/default/files/medias/documents/working-paper_470_2013.pdf
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Paper provided by Banque de France in its series Working papers with number 470.

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Length: 26 pages
Date of creation: 2013
Handle: RePEc:bfr:banfra:470
Contact details of provider: Postal:
Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS

Web page: http://www.banque-france.fr/

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