SUMMARYConvergence in the gross domestic product series of five European countries is empirically identified using multivariate time series models that are based on unobserved components with dynamic converging properties. We define convergence in terms of a decrease in dispersion over time and model this decrease via mechanisms that allow for gradual reductions in the ranks of covariance matrices associated with the disturbance vectors driving the unobserved components of the model. The inclusion of such convergence mechanisms within the formulation of unobserved components makes the identification of various types of convergence possible. The common converging component model is estimated for the per capita gross domestic product of five European countries: Germany, France, Italy, Spain and the Netherlands. It is found that convergence features in trends and cycles are present and are associated with some key events in the history of European integration.

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This article investigates the effect of Dutch primary school inspections on test scores. These inspections are assessments of the educational quality of schools. The authors use two approaches to estimate the effect of the inspections. The first approach, based on a standard fixed effects model, indicates that inspections lead to slightly better school performance: Test scores increase by 2% to 3% of a standard deviation. However, the fixed effects model might be sensitive to selection bias. The second approach exploits a sample of randomly selected schools originally drawn for the purpose of compiling the annual report of the state of Dutch education. Based on this approach, the authors find that inspections do no harm but seem to have little or no effect on student performance.

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