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The Eurozone Convergence through Crises and Structural Changes

Listed author(s):
  • Merih Uctum
  • Remzi Uctum
  • Chu-Ping C. Vijverberg

In light of several economic and financial crises and institutional changes experienced by the Eurozone countries, we examine whether the adoption of the euro led to business cycle synchronization or fostered convergence of growth rates. Controlling for reverse causality, we conduct multiple endogenous break tests and find that while output growth was synchronized for some countries, convergence occurred in a nonlinear way for others: (i) convergence was not triggered by adoption of the euro but by international or idiosyncratic shocks; (ii) in several countries convergence started long before the introduction of the euro, accelerated during the 1990s and continued since then, reflecting persistent influence of the core countries; (iii) convergence has been prevalent among the non-Eurozone economies in our sample.

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File URL: http://economix.fr/pdf/dt/2017/WP_EcoX_2017-38.pdf
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Paper provided by University of Paris Nanterre, EconomiX in its series EconomiX Working Papers with number 2017-38.

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Length: 26 pages
Date of creation: 2017
Handle: RePEc:drm:wpaper:2017-38
Contact details of provider: Postal:
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Web page: https://economix.fr/
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