Analysing convergence in Europe using the non-linear single factor model

Empirical Economics

Volumn 41, Issue 2, 2011, Pages 343-369

  Fritsche, Ulrich ^a   Kuzin, Vladimir ^b  

^a UNIVERSITY OF HAMBURG   (Germany)

^b DIW BERLIN   (Germany)

Author keywords

Convergence; European Monetary Union; Factor model; Income; Price level; Productivity

Indexed keywords

CONVERGENCE; ECONOMIC ANALYSIS; EUROPEAN MONETARY UNION; GROSS DOMESTIC PRODUCT; INCOME; MODELING; PRICE DYNAMICS; TOTAL FACTOR PRODUCTIVITY;

GERMANY; ITALY;

EID: 80052359892     PISSN: 03777332     EISSN: None     Source Type: Journal    
DOI: 10.1007/s00181-010-0385-4     Document Type: Article

References (35)

1. Alesina A, Barro R (2002) Currency unions. Q J Econ 117: 409-436.
2. Altissimo F, Ehrmann M, Smets F (2006) Inflation persistence and price setting behaviour in the euro area. A summary of the ipn evidence. Occasional Paper Series 46, European Central Bank. http://www. ecb. int/pub/pdf/scpops/ecbocp46. pdf.
3. Angeloni I, Ehrmann M (2004) Euro area inflation differentials. Working Paper Series 388, European Central Bank.
4. Angeloni I, Aucremanne L, Ehrmann M, Gali J, Levin A, Smets F (2006) New evidence on inflation persistence and price stickiness in the euro area: Implications for macro modelling. J Eur Econ Assoc 4: 562-574.
5. Bai J (2003) Inferential theory for factor models of large dimensions. Econometrica 71: 135-172.
6. Barro R, Sala-i-Martin X (1991) Convergence across states and regions. Brookings Papers Econ Activity 1991(1): 107-182.
7. Barro R, Sala-i-Martin X (1992) Convergence. J Political Econ 100(2): 223-251.
8. Bernard AB, Durlauf SN (1996) Interpreting tests of the convergence hypothesis. J Econ 71: 161-173.
9. Blanchard O (2008) The state of macro. NBER Working Paper 14259, NBER.
10. Busetti F, Forni L, Harvey A, Venditti F (2006) Inflation convergence and divergence within the european monetary union. ECB Working Paper Series 574, European Central Bank.
11. Campolmi A, Faia E (2006) Cyclical inflation divergence and different labor market institutions in the emu. Working Paper Series 619, European Central Bank.
12. Cecchetti S, Mark M, Sonora R (2002) Price level convergence among united states cities: Lessons for the European central bank. Int Econ Rev 43(4): 1081-1099.
13. Corsetti G (2008) A modern reconsideration of the theory of optimal currency areas. EUI Working Papers ECO 2008/12, EUI.
14. Cuaresma JC, Egert B, Silgoner MA (2007) Price level convergence in Europe: did the introduction of the euro matter? Monetary Policy Econ Q 1(07): 100-113.
15. Devereux M, Engel C, Tille C (2003) Exchange rate pass-through and the welfare effects of the euro. Int Econ Rev 44(1): 223-242.
16. Dullien S, Fritsche U (2008) Does the dispersion of unit labor cost dynamics in the emu imply long-run divergence? Results from a comparison with the united states of America and Germany. J Int Econ Econ Policy 5(3): 269-295.
17. Durlauf SN, Quah DT (1999) The new empirics of economic growth. In: Taylor JB, Woodford M (eds) Handbook of macroeconomics, vol 1A. North-Holland, Elsevier Science, pp 235-308.
18. Eichengreen B (2007) The breakup of the euro area. NBER Working Paper 13393, NBER. http://www. nber. org/papers/w13393.
19. Eichengreen B (2008) Sui generis emu. NBER Working Paper 13740, NBER. http://www. nber. org/papers/w13740.
20. Emerson M, Gros D, Italianer A (1992) One market, one money: an evaluation of the potential benefits and costs of forming an economic and monetary union. Oxford University Press, NY, USA.
21. European Central Bank (2003) Inflation differentials in the euro area: potential causes and policy implications. Tech. rep., European Central Bank. http://www. ecb. int/pub/pdf/other/inflationdifferentialreporten. pdf.
22. Fritsche U, Lein S, Weber S (2009) Do prices in emu converge (non-linearly)? DEP Macroeconomics and Finance Series 4.
23. Hobijn B, Franses PH (2000) Asymptotically perfect and relative convergence of productivity. J Appl Econ 15: 59-81.
24. Islam N (2003) What have we learnt from the convergence debate. J Econ Surv 17(3): 309-362.
25. Lane P (2006) The real effects of emu. Discussion Paper Series 5536, CEPR.
26. Melander A, Sismanidis G, Grenouilleau D (2007) The track of the commission's forecast: an update. European Economy. Economic Papers 291, European Commission. http://ec. europa. eu/economy_finance/publications/publication9291_en. pdf.
27. Phillips PCB (2005) Challenges of trending time series econometrics. Math Comput Simul 68: 401-416.
28. Phillips PCB, Sul D (2007) Transition modelling and econometric convergence tests. Econometrica 75: 1771-1855.
29. Phillips PCB, Sul D (2009) Economic transition and growth. J Appl Econ 24(7): 1153-1185.
30. Quah DT (1997) Empirics for growth and distribution: stratification, polarization, and convergence clubs. J Econ Growth 2: 27-59.
31. Rose A (2000) One money, one market: the effect of common currencies on trade. Econ Policy 30: 7-45.
32. Rose A, Engel C (2002) Currency unions and international integration. J Money Credit Banking 34(4): 1067-1086.
33. Tenreyro S, Barro R (2007) Economic effects of currency unions. Econ Inq 45(1): 1-197.
34. Weil DN (2004) Economic growth. Addison Wesley, Boston.
35. Woodford M (2009) Convergence in macroeconomics: elements of the new synthesis. Am Econ J Macroecon 1(1): 267-279.