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On Asymmetric Business Cycle Effects on Convergence Rates: Some European Evidence


  • Ramón María-Dolores
  • Israel Sancho


In this paper, we provide empirical evidence for some European countries, over the period 1963-2000, on whether business cycle affects convergence process or catching-up. To do so, we first evaluate beta-convergence. We find evidence in favour of this type of convergence for six countries (Spain, Portugal, Finland, Denmark, Sweden and Germany). Spain, Portugal and Finland are countries initially "poor" with a growth rate larger than EU-15 average. On the contrary, Germany, Denmark and Sweden are countries initially "rich" growing smaller than average. We observe that convergence rates in "poor" countries has been larger during expansions than recessions while two of the "rich" countries, Denmark and Sweden, experiment the opposite effect

Suggested Citation

  • Ramón María-Dolores & Israel Sancho, 2004. "On Asymmetric Business Cycle Effects on Convergence Rates: Some European Evidence," Computing in Economics and Finance 2004 45, Society for Computational Economics.
  • Handle: RePEc:sce:scecf4:45

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    More about this item


    stochastic convergence; cyclical convergence; Markov switching models;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes


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