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Institutional diversity in the Euro area : Any evidence of convergence?

Author

Listed:
  • Pérez-Moreno, Salvador

    (University of Malaga)

  • Bárcena-Martín, Elena

    (University of Malaga)

  • Ritzen, Jo

    (UNU-MERIT, Maastricht University)

Abstract

The institutional characteristics of the 19 Euro countries, such as Government efficiency or undue influence or corporate ethics, have diverged in the period 2006-2015. This endangers the sustainability of the EMU, as institutional characteristics are an important element of competitiveness. We find that the overall inequality in the state of institutions across the EMU, as measured by the Gini coefficient, increased. The institutional changes across Euro area countries are linked both to the differences in the intensity of the financial and economic crisis (likely to have a two-way causality) as well as the policy responses in terms of fiscal consolidation applied. The empirical findings tend to support the call for structural reforms enhancing institutional quality in order to shorten the institutional gap between 'core' and 'periphery' Euro area countries.

Suggested Citation

  • Pérez-Moreno, Salvador & Bárcena-Martín, Elena & Ritzen, Jo, 2017. "Institutional diversity in the Euro area : Any evidence of convergence?," MERIT Working Papers 2017-047, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2017047
    as

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    File URL: https://www.merit.unu.edu/publications/wppdf/2017/wp2017-047.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    institutions; convergence; beta-convergence; inequality; Euro area; competitiveness;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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