Economic Convergence in the Euro Area: Coming Together or Drifting Apart?

Franks, Jeffrey R.; Barkbu, Bergljot; Blavy, Rodolphe; Oman, William; Schoelermann, Hanni

doi:10.5089/9781484338490.001

Cited by 63 publications

(53 citation statements)

References 27 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Nevertheless, as many had predicted, monetary integration failed in promoting the real convergence of central and peripheral economies. Income convergence stagnated at first and reversed following the financial crisis (Franks et al, 2018).…”

Section: Literature Review and Methodology Of Researchmentioning

confidence: 99%

Euro Zone Budget and its Effects on the European and Monetary Union (EMU) Integration

Panagopoulos¹

2020

IJBA

View full text Add to dashboard Cite

The implemention of a monetary union in Europe, to take full benefit of the Single Market’s potential benefits, has not up till now delivered the expected outcomes. On the contrary, the euro area has been afflicted by many difficulties, including weak growth, unemployment, and inequality. Many blame the euro’s malfunctioning design, and especially its inability to promote economic convergence and provide amendment and stabilization mechanisms. The latter view prevailed when shaping the austerity policies imposed on the countries more affected by the financial and sovereign debt crises, intensifying an economic recession with dramatic social consequences. Citizens’ distrust in the European Union’s institutions grew, along with support for nationalistic political forces opposing the European integration project. Some of EMU’s needed reforms will both promote convergence, and help smooth economic activity and maintain citizens’ wellbeing when crises occur. The creation of an autonomous budget for the euro zone was mentioned in a European Commission discussion paper on the future of the EU. This is an eminently political matter, very sensitive to domestic public opinions. In fact, the existence of a budget for the euro zone, in recognition of the fact that this subset of EU countries has specific needs, distinct from those of other non-EMU members, would translate into a situation requiring the design of different budgets within the EU. Such issue is at the heart of the intense debate between holders of different views concerning the future of the EU and of the euro zone, especially in what concerns the question of which of these geometries will in the future be the engine for further economic and political integration in Europe. This paper assesses one of the main deficiencies of the euro’s governance model – lack of automatic stabilization – and discusses proposals to overcome it.

show abstract

Section: Literature Review and Methodology Of Researchmentioning

confidence: 99%

Euro Zone Budget and its Effects on the European and Monetary Union (EMU) Integration

Panagopoulos¹

2020

IJBA

View full text Add to dashboard Cite

show abstract

“…between the European Commission and the European Parliament. Recent overviews and assessments of the current state of EU convergence have been provided by European Commission (2017), Dolls et al (2018), Andersen et al (2018) or Franks et al (2018).…”

Section: Related Literaturementioning

confidence: 99%

Institutional Design and Spatial (In)equality – The Janus Face of Economic Integration

Ott

Soretz

2020

SSRN Journal

View full text Add to dashboard Cite

This paper analyzes within a spatial endogenous growth setting the impact of public policy coordination on agglomeration. Governments in each of the two symmetric regions provide a local public input that becomes globally effective due to integration. Micro-foundation of governmental behavior is based on three different coordination schemes: autarky, full or partial coordination. Scale effects act as agglomeration force and in addition to private capital agglomeration increase the concentration of the public input. Integration promotes dispersion forces with respect to the distribution of physical capital which are based on decreasing private returns. However, within the governments' decision on the concentration of the public input, increasing integration reinforces agglomeration because it promotes the interregional productive use of the public input. Taking feedback effects between the private and the public sector into account leads to mutual reinforcement, hence agglomeration forces almost always dominate and the spreading equilibrium becomes unstable. If convergence is a separate (additional) political objective, it needs sustained additional political effort.

show abstract

“…The bulk of scholarly work on the Semester can arguably be grouped into three general categories. A first category looks at whether the Semester serves as a source of monitoring and scrutiny (Fabbrini 2017; Horvarth 2017; Crespy and Vanheuverzwijn 2017) or convergence (Franks, Barkbu, Blavy, Oman et al 2018;Estrada, Galí and López-Salido 2013). This includes work on reforming the Stability and Growth Pact and complementing it with the Fiscal Compact (Fabbrini 2013), on the utility of the measures involved in the 'Two-Pack' and 'Six-Pack' regulations (Verdun 2015; Savage and Verdun 2016; Roger, Otjes and van der Veer 2017; Joerges 2014; Horvath 2017), respectively, and the integrated economic and employment policy guidelines within Europe 2020 (Bekker 2018).…”

Section: What Is the European Semester And How Is It Being Studied?mentioning

confidence: 99%

Measuring Economic Reform Recommendations under the European Semester: ‘One Size Fits All’ or Tailoring to Member States?

D’Erman

Haas

Schulz

et al. 2019

JCER

View full text Add to dashboard Cite

In 2010 the European Semester was created to improve coordination of fiscal and economic policies within Europe's Economic and Monetary Union. The Semester aims to tackle economic imbalances by giving European Union (EU) member states country-specific recommendations (CSRs) regarding their public budgets as well as their wider economic and social policies with a view to enabling better policy coordination among Euro Area member states. In this article, we develop a method to assess the way in which the CSRs have been addressing coordination and offer a systematic analysis of the way they have been formulated. We offer a way to code CSRs as well as one to analyse progress evaluations. Furthermore, we seek to use our results to address one of the reoccurring questions in the literature: whether the EU is pursuing a 'one size fits all' approach to economic policy making in the Euro Area? The findings indicate that recommendations for different types of market economies among the Euro Area members tend to focus on different policy areas.

show abstract

Economic Convergence in the Euro Area: Coming Together or Drifting Apart?

Cited by 63 publications

References 27 publications

Euro Zone Budget and its Effects on the European and Monetary Union (EMU) Integration

Euro Zone Budget and its Effects on the European and Monetary Union (EMU) Integration

Institutional Design and Spatial (In)equality – The Janus Face of Economic Integration

Measuring Economic Reform Recommendations under the European Semester: ‘One Size Fits All’ or Tailoring to Member States?

Contact Info

Product

Resources

About