Convergence Clubs, the Euro-Area Rank and the Relationship between Banking and Real Convergence

2011 ◽  
Author(s):  
Massimiliano Affinito
Keyword(s):  
Euro Area ◽  
Real Convergence ◽  
Convergence Clubs ◽  
The Relationship

scholarly journals Real Convergence Across the Euro Area

2020 ◽  
Vol 55 (5) ◽  
pp. 301-311
Author(s):  
Leonor Coutinho ◽  
Alessandro Turrini
Keyword(s):  
Total Factor Productivity ◽  
Euro Area ◽  
Emerging Market ◽  
Factor Productivity ◽  
Macroeconomic Imbalances ◽  
Real Convergence ◽  
Growth Regressions ◽  
Tradable Sector ◽  
Actual Growth ◽  
The Relationship

Abstract This paper studies the relationship between real convergence in the euro area and macroeconomic imbalances. It compares the main features of convergence within the euro area with other EU and non-EU country groups, looking at both ‘sigma’ and ‘beta’ convergence in output and total factor productivity. Expected convergence paths for euro area countries are estimated using growth regressions run on a large panel of advanced and emerging market economies and compared to actual growth. The findings support the view that EU and euro area countries display similar convergence patterns to those of other country groups, while the group of countries that adopted the euro first exhibit relatively weak convergence since before the financial crisis. Such differences could be partly linked to relatively low dispersion in per capita incomes across this country group, although lack of convergence is also largely due to persisting differences in total factor productivity performance. The findings also suggest that macroeconomic imbalances accumulated in the pre-crisis period such as high private and government debt and strong growth in the non-tradable sector have been associated with lower convergence, particularly for euro area countries.

scholarly journals Revisiting euro area accession terms: fiscal rectitude is not sufficient!

2019 ◽  
Vol 69 (s1) ◽  
pp. 73-97
Author(s):  
Daniel Daianu
Keyword(s):  
Exchange Rate ◽  
Euro Area ◽  
Risk Sharing ◽  
Critical Mass ◽  
Value Chains ◽  
Middle Income ◽  
Real Convergence ◽  
Production Value ◽  
Per Se ◽  
Productivity Gains

This paper argues that there are conditions for successful euro area (EA) accession, apart from fiscal rectitude. One is an ex ante critical mass of real convergence which should enhance lasting nominal convergence. Another condition is an overhaul of EA mechanisms and policies that should make it a properly functioning monetary union, which implies an adequate mix between risk-reduction and risk-sharing. It is argued that risk-sharing cannot be secured by private sector arrangements only. Entering the ERM2 is deemed to be no less demanding than euro area accession per se, especially for countries that use fl exible exchange rate regimes. The paper examines also the infl uence of production (value) chains on the efficacy of autonomous monetary and exchange rate policies when it comes to controlling external imbalances; macro-prudential policies, too, are highlighted in this regard. Steady productivity gains are a must for surmounting the middle income trap and achieving sustainable real convergence.

scholarly journals The relationship between liquidity risk and probability of default: Evidence from the Euro area

2013 ◽  
Vol 3 (1) ◽  
pp. 42-50 ◽  
Author(s):  
Doriana Cucinelli
Keyword(s):  
Panel Data ◽  
Euro Area ◽  
Time Horizon ◽  
Credit Rating ◽  
Liquidity Risk ◽  
Probability Of Default ◽  
Liquidity Management ◽  
Coverage Ratio ◽  
Short Time ◽  
The Relationship

The main objective of this study is to analyze the type of relationship that exists between liquidity risk - measured with the liquidity coverage ratio and the net stable funding ratio - and the probability of default. The sample is composed of 575 listed and non-listed Eurozone banks and the methodology applied in the analysis is OLS regression based on panel data. The results show a relationship only between the liquidity coverage ratio and credit rating, while there is no relationship between the longterm liquidity measure and probability of default. In relation to the crisis, the results highlight divergent bank liquidity management only in the short time horizon.

scholarly journals Real Convergence in the Euro Area: A Long-Term Perspective

2017 ◽  
Author(s):  
Juan Luis Diaz del Hoyo ◽  
Ettore Dorrucci ◽  
Frigyes Ferdinand Heinz ◽  
Sona Muzikarova
Keyword(s):  
Euro Area ◽  
Real Convergence

NONLINEARITIES IN THE DYNAMICS OF THE EURO AREA DEMAND FOR M1

2009 ◽  
Vol 13 (1) ◽  
pp. 1-19 ◽  
Author(s):  
Alessandro Calza ◽  
Andrea Zaghini
Keyword(s):  
Error Correction ◽  
Euro Area ◽  
Money Demand ◽  
The United States ◽  
Error Correction Model ◽  
Correction Model ◽  
The Past ◽  
Long Run ◽  
Theoretical Predictions ◽  
The Relationship

This paper finds evidence of nonlinearities in the dynamics of the euro area demand for the narrow aggregate M1. A long-run money demand relationship is first estimated over a sample period covering the past three decades. Although the parameters of the relationship are jointly stable, there are indications of nonlinearity in the residuals of the error-correction model. This nonlinearity is explicitly modeled using a fairly general Markov switching error-correction model with satisfactory results. The empirical findings of the paper are consistent with theoretical predictions of nonlinearities in the dynamics of adjustment to equilibrium stemming from “buffer stock” and “target-threshold” models and with analogous empirical evidence for European countries and the United States.

Is Fiscal Policy Procyclical in the Euro Area?

2013 ◽  
Vol 14 (1) ◽  
pp. 73-88 ◽  
Author(s):  
Florence Huart
Keyword(s):  
Fiscal Policy ◽  
The Netherlands ◽  
Euro Area ◽  
Oecd Countries ◽  
Discretionary Fiscal Policy ◽  
Significant Case ◽  
The Relationship ◽  
Public Deficits ◽  
Public Debts

Abstract We test the relationship between the cyclically adjusted primary balance and alternative indicators of cyclical conditions for the euro area and 18 OECD countries over the period 1970-2009. A countercyclical stance of discretionary fiscal policy is found during bad times after 1999 in the euro area as a whole and in a few member countries only (France, Ireland and The Netherlands). It is also associated with high public deficits or low public debts. There is no significant case of procyclical fiscal policy after 1999, neither in good times nor in bad times.

scholarly journals Testing Real Convergence as a Prerequisite for Long Run Sustainability

2021 ◽  
Vol 13 (17) ◽  
pp. 9943
Author(s):  
Marta Christina Suciu ◽  
Adrian Petre ◽  
Laura Gabriela Istudor ◽  
Mircea Ovidiu Mituca ◽  
Gheorghe Alexandru Stativa ◽  
...  
Keyword(s):  
Euro Area ◽  
Convergence To Equilibrium ◽  
Economic Convergence ◽  
The European Union ◽  
The Czech Republic ◽  
Income Disparities ◽  
Real Convergence ◽  
Long Run ◽  
Equilibrium Level ◽  
Convergence Cluster

The main objective of this research is to estimate the degree of real convergence of the countries that joined the European Union between 2004–2013 as an essential precondition for sustainable accession to the Euro Area. Through this study, we tried to create a clear, real and comparative image for the downward trend in the dispersion of the GDP/capita and the speed by which countries with different integration stages achieve the real economic convergence to equilibrium level. In this respect, we tested real convergence by regression models. Further, in order to verify the robustness of the results we applied a cluster analysis. The main results show that non-Euro Area countries have a tendency to individually reduce income disparities with the Euro Area average, but do not register a convergent economic growth and do not form a homogeneous convergence cluster, unlike the newer Euro Area Member Countries. Another representative result is that the Czech Republic seems to be the best prepared country to adopt the single currency in a sustainable way, while Bulgaria is at the opposite pole.

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