Measuring Economic Convergence

Hall, Stephen G.; Robertson, D. H.; Wickens, Michael

doi:10.1002/(sici)1099-1158(199704)2:2<131::aid-ijfe42>3.0.co;2-m

Cited by 28 publications

(20 citation statements)

References 5 publications

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“…Hall, Robertson and Wickens (1997) consider a number of formal definitions of convergence which illustrate the difficulty here. So consider the pointwise convergence of two series X t and Y t which we might define as occurring when,…”

Section: Defining Convergencementioning

confidence: 99%

A new look at economic convergence in Europe: a common factor approach

Becker

Hall

2008

Int. J Fin Econ

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A new look at economic convergence in Europe: a common factor approach This item was submitted to Loughborough University's Institutional Repository by the/an author. Additional Information:• This is a working paper. AbstractWe propose a common factor approach to analyse convergence, which we implement using principal components analysis. We show that this method provides a useful new way of approaching the convergence debate. We apply this technique to a dataset of nominal and real monthly exchange rates of the twelve member countries of the European Monetary Union over the period 1970-2001. Our empirical results neatly capture the convergence patterns related to the various regimes from Bretton Woods toward EMU. The UK's Pound Sterling has been on a gradual convergence path to the Euro, although convergence is less progressed than it was for the EMU countries by 1999.JEL classification: C22, F31

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Section: Defining Convergencementioning

confidence: 99%

A new look at economic convergence in Europe: a common factor approach

Becker

Hall

2008

Int. J Fin Econ

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“…According to Hall, Robertson and Wickens (1997) the most appropriate way of assessing if a country has begun a process of convergence is the use of timevarying parameters models. This technique allows for a dynamic structural change in the implied variables and can also measure the speed of convergence.…”

Section: Time-varying Parametersmentioning

confidence: 99%

Price convergence of peripheral European countries on the way to the EMU: A time series approach

Camarero

Esteve

Tamarit

2000

Empirical Economics

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Abstract. This paper examines price and in¯ation convergence between three European countries (Italy, Spain and the U.K.) and a European average and, alternatively, between them and Germany from the beginning of the 80's.For this purpose the long-run stochastic relationships on prices derived from the convergence criteria agreed in the Maastricht Treaty are analyzed. In order to do this, some recent unit root tests have been applied as well as timevarying parameters models.The results reject the long-run convergence hypothesis in all the cases but allow us to accept the existence of catching-up with the European average and Germany in some cases depending on the nature of the prices and on the countries considered.

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“…Hall et al ( 1997) refer to three definitions of convergence: point wise, in expectation and in probability. The most appealing definition is convergence in expectation, which occurs when the limit of the expected value of the scaled difference between two series (X t and Y t for instance) converges to a constant:…”

Section: The Methodology For Measuring Convergencementioning

confidence: 99%

“…The analysis of the convergence of business cycles using the Kalman filter, as proposed by Hall et al ( 1997), is new in the literature. In addition, the literature on convergence has largely ignored the real Unit Labour Cost (ULC) as an indicator of the business cycle despite its importance in the New Keynesian approach to inflation.…”

Section: Introductionmentioning

confidence: 99%

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Inflation and business cycle convergence in the euro area: Empirical analysis using an unobserved component model

Lagoa¹,

Hall²

2011

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The literature on optimum currency areas states that large inflation differentials can undermine monetary union. In the euro area, inflation rates diverged after the creation of the single currency, but started to converge again from mid-2002. Against this background, we assess the convergence of inflation rates and business cycles and study the relationship between them. The analysis is made using an unobserved component model estimated with the Kalman filter. In general, from 1980 to 2008 inflation rates and business cycles became more aligned in the euro area, but inflation rates converged more quickly than business cycles. The output gap is found to be a better indicator of the business cycle than unit labour cost when studying convergence. By looking at the causality between the convergence of inflation and output gap, it is found that inflation divergence has a limited destabilising economic impact.

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Measuring Economic Convergence

Cited by 28 publications

References 5 publications

A new look at economic convergence in Europe: a common factor approach

A new look at economic convergence in Europe: a common factor approach

Price convergence of peripheral European countries on the way to the EMU: A time series approach

Inflation and business cycle convergence in the euro area: Empirical analysis using an unobserved component model

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