IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Ten years of EMU: Convergence, Divergence and New Policy Priorities

  • Nicos Christodoulakis

Has the single currency promoted or hindered convergence among the countries of the Eurozone? On the one hand, asymmetric shocks have subsided after the creation of the single currency and FDI has been substantially promoted both inside and outside the EMU as a result of reduced exchange rate volatility, more integration and better institutional functioning. On the other hand, an examination of the catching-up process between the less and more affluent countries of the Eurozone suggests that convergence has been fading since the EMU was initiated in 1999. Another worrying development in the Eurozone is the emergence of unprecedented CA deficits in the southern Eurozone countries, while the northern Eurozone group enjoys substantial surpluses. Although both groups of countries have attracted increased FDI flows after EMU, there seems to be a sharp differentiation regarding size and composition. In the southern countries, the housing sector has attracted relatively more investment than the production sector, while the reverse seems to be the case in the northern group. Thus, investment in the northern (southern) Eurozone countries has increased traded (non-traded) output and caused an improvement (deterioration) in the trade balance. To face such imbalances, new policy priorities are required in the Eurozone that put more emphasis on convergence and competitiveness.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.cnb.cz/www.cnb.cz/en/research/research_publications/irpn/download/rpn_1_2008.pdf
Download Restriction: no

Paper provided by Czech National Bank, Research Department in its series Research and Policy Notes with number 2008/01.

as
in new window

Length:
Date of creation: Dec 2008
Date of revision:
Handle: RePEc:cnb:rpnrpn:2008/01
Contact details of provider: Postal: Na Prikope 28, 115 03 Prague 1
Phone: 00420 2 2442 1111
Fax: 00420 2 2421 8522
Web page: http://www.cnb.cz/en/research/research_intro/
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Aleksander Aristovnik, 2006. "The Determinants & Excessiveness of Current Account Deficits in Eastern Europe & the Former Soviet Union," William Davidson Institute Working Papers Series wp827, William Davidson Institute at the University of Michigan.
  2. Domenico Giannone & Lucrezia Reichlin, 2005. "Trends and cycles in the Euro Area: how much heterogeneity and should we worry about it?," Macroeconomics 0511016, EconWPA.
  3. Aadne Cappelen & Fulvio Castellacci & Jan Fagerberg & Bart Verspagen, 2003. "The Impact of EU Regional Support on Growth and Convergence in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 41, pages 621-644, 09.
  4. Carlo Altavilla, 2004. "Do EMU Members Share the Same Business Cycle?," Journal of Common Market Studies, Wiley Blackwell, vol. 42(5), pages 869-896, December.
  5. Tamim Bayoumi & Barry Eichengreen, 1992. "Shocking Aspects of European Monetary Unification," NBER Working Papers 3949, National Bureau of Economic Research, Inc.
  6. Sebnem Kalemli-Ozcan & Bent E. Sorensen & Oved Yosha, 2004. "Asymmetric Shocks and Risk Sharing in a Monetary Union: Updated Evidence and Policy Implications for Europe," Working Papers 2004-05, Department of Economics, University of Houston.
  7. Romain Duval & Jørgen Elmeskov, 2005. "The Effects of EMU on Structural Reforms in Labour and Product Markets," OECD Economics Department Working Papers 438, OECD Publishing.
  8. Eva Sierminska & Yelena Takhtamanova, 2007. "Wealth effects out of financial and housing wealth: cross country and age group comparisons," Working Paper Series 2007-01, Federal Reserve Bank of San Francisco.
  9. Fragkiskos Filippaios & Marina Papanastassiou, 2008. "US Outward Foreign Direct Investment in the European Union and the Implementation of the Single Market: Empirical Evidence from a Cohesive Framework," Journal of Common Market Studies, Wiley Blackwell, vol. 46, pages 969-1000, December.
  10. Robert Shelburne, 2008. "Current Account Deficits in European Emerging Markets," International Trade and Finance Association Conference Papers 1130, International Trade and Finance Association.
  11. Ron Martin, 2000. "Emu Versus The Regions? Regional Convergence And Divergence In Euroland," ESRC Centre for Business Research - Working Papers wp179, ESRC Centre for Business Research.
  12. Michael G. Arghyrou & Georgios Chortareas, 2008. "Current Account Imbalances and Real Exchange Rates in the Euro Area," Review of International Economics, Wiley Blackwell, vol. 16(4), pages 747-764, 09.
  13. Silvana Tenreyro & Robert J. Barro, 2003. "Economic Effects of Currency Unions," NBER Working Papers 9435, National Bureau of Economic Research, Inc.
  14. Iain Begg, 2003. "Complementing EMU: Rethinking Cohesion Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 19(1), pages 161-179.
  15. Turnovsky, Stephen J, 1996. "Endogenous Growth in a Dependent Economy with Traded and Nontraded Capital," Review of International Economics, Wiley Blackwell, vol. 4(3), pages 300-321, October.
  16. Bayoumi, Tamim & Eichengreen, Barry, 1992. "Shocking Aspects of Monetary Unification," Department of Economics, Working Paper Series qt791143kp, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  17. Cohen, Daniel & Wyplosz, Charles, 1989. "The European Monetary Union: An Agnostic Evaluation," CEPR Discussion Papers 306, C.E.P.R. Discussion Papers.
  18. Ben Gardiner & Ron Martin & Tyler Peter, 2004. "Competitiveness, Productivity and Economic Growth across the European Regions," ERSA conference papers ersa04p333, European Regional Science Association.
  19. Frankel, Jeffrey A & Rose, Andrew K, 1996. "The Endogeneity of the Optimum Currency Area Criteria," CEPR Discussion Papers 1473, C.E.P.R. Discussion Papers.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cnb:rpnrpn:2008/01. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jan Babecky)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.