Analysing Convergence in Europe Using a Non-linear Single Factor Model
We investigate convergence in European price level, unit labor cost, income, and productivity data over the period of 1960-2006 using the non-linear time-varying coefficients factor model proposed by Phillips and Sul (2007). This approach is extremely flexible on order to model a large number of transition paths to convergence. We find regional clusters in consumer price level data. GDP deflator data and unit labor cost data are far less clustered than CPI data. Income per capita data indicate the existence of three convergence clubs without strong regional linkages; Italy and Germany are not converging to any of those clubs. Total factor productivity data indicate the existence of a small club including fast-growing countries and a club consisting of all other countries.
|Date of creation:||Jun 2008|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.wiso.uni-hamburg.de/dwp|
More information through EDIRC
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.:
- Rose, Andrew K & Engel, Charles, 2002.
"Currency Unions and International Integration,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 34(4), pages 1067-89, November.
- Engel, Charles M & Rose, Andrew K, 2001. "Currency Unions and International Integration," CEPR Discussion Papers 2659, C.E.P.R. Discussion Papers.
- Andrew K. Rose & Charles Engel, 2000. "Currency Unions and International Integration," NBER Working Papers 7872, National Bureau of Economic Research, Inc.
- Nazrul Islam, 2003. "What have We Learnt from the Convergence Debate?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 309-362, 07.
- Silvana Tenreyro & Robert J. Barro, 2003.
"Economic Effects of Currency Unions,"
NBER Working Papers
9435, National Bureau of Economic Research, Inc.
- Phillips, Peter C.B., 2005.
"Challenges of trending time series econometrics,"
Mathematics and Computers in Simulation (MATCOM),
Elsevier, vol. 68(5), pages 401-416.
- Lane, Philip R., 2006.
"The Real Effects of EMU,"
CEPR Discussion Papers
5536, C.E.P.R. Discussion Papers.
- Philip R. Lane, 2006. "The Real Effects of EMU," The Institute for International Integration Studies Discussion Paper Series iiisdp115, IIIS.
- Bart Hobijn & Philip Hans Franses, 2000. "Asymptotically perfect and relative convergence of productivity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(1), pages 59-81.
- Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR;CES;MSH, vol. 15(30), pages 7-46, 04.
When requesting a correction, please mention this item's handle: RePEc:hep:macppr:200802. 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: (Ulrich Fritsche)
If references are entirely missing, you can add them using this form.