Paper #1386

Title:

Patterns of convergence and divergence in the euro area

Authors:

Ángel Estrada, Jordi Galí and David López-Salido

Date:

October 2013

Abstract:

We study the extent of macroeconomic convergence/divergence among euro area countries. Our analysis focuses on four variables (unemployment, inflation, relative prices and the current account), and seeks to uncover the role played by monetary union as a convergence factor by using non-euro developed economies and the pre-EMU period as control samples.

Keywords:

macroeconomic convergence, labor markets, competitiveness, inflation differentials, current account imbalances, relative prices.

JEL codes:

E24, F31, O47

Area of Research:

Macroeconomics and International Economics

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