Complementing EMU: Rethinking Cohesion Policy

Ten Years of Emu: Convergence, Divergence and New Policy Priorities

“…For several countries it was precisely this prospect of accelerating real convergence that helped governments to win the support of public opinion for carrying out the fiscal and market reforms that were necessary to qualify for the EMU project. Thus, as noted by Begg (2003), after EMU was established and started to get more consolidated attention was inevitably focusing more on whether its benefits are shared equitably by its members.…”

EMU and the dynamics of regional per capita income inequality in Europe

“…Fixed effects are preferred to random effects because the Hausman tests also reported in Tables 2 and 3 reject the hypothesis that country-specific effects γ i are uncorrelated with the regressors (with the exception of the first three columns of Table 2). For ease of presentation 18 Barry and Begg [9]; Barry [8]; Begg [12]; Midelfart et al [55]; Artis et al [3]. 19 Ireland also received monies through the Cohesion Fund, but is not included in the study.…”

“…On the other hand, the absence of independent exchange rate and monetary policy would make it harder to tackle national or regional asymmetric shocks, which could increase interregional inequalities. This is notably true for Southern European countries where labor market rigidities would make these countries more vulnerable to asymmetric shocks [2,8,9,12]. Barry and Begg [9] conclude that the effects of EMU will be more pronounced in countries that have to change the most in order to participate in EMU.…”

“…4, between 1977 and 2003, within-country inequality accounted on average for 61.5% of overall inequality. 12 Starting with a share of 58.4% of total inequality in 1977, within-country inequality remained stable around 58%-60% between 1977 and 1990. It then fell to 55.8% in 1992, before increasing steadily until 2003, when within-country inequality accounted for 70% of overall inequality.…”

“…Inequality fell most steeply in Austria and Italy in the 1980s. In Greece, the sharp drop in 12 Because this increase in within-country inequality started in 1995, and coincides with the increase in inequality among Swedish regions, I checked whether the trend of the within component could have been driven by the evolution of domestic inequality in Sweden. When I perform the decomposition without Sweden, the increase in the late 1990s persists.…”