Sustainable Economic Growth in the Euro Area: The Need for a “Long View” and “Going Granular”

Dorrucci, Ettore

doi:10.1007/978-3-319-97692-1_8

Cited by 1 publication

(2 citation statements)

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“…Sustainable economic convergence is important not only for the individual countries that benefit from it, but also for the smooth functioning of the European Union [8,67].…”

Section: Discussionmentioning

confidence: 99%

“…A higher level of economic integration and a similarity of economic cycles should foster a process of income convergence [6,7]. Better institutional quality and growth in total factor productivity can also lead to avoiding falling into the nonconvergence trap [8]. The equalization of income levels between Member States can be crucial in shaping social cohesion and reducing excessive migration within the European Union.…”

Section: Introductionmentioning

confidence: 99%

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Sustainability of Income Convergence in the European Union: Two Downturns—Two Different Stories

Batóg,

Batóg

2024

Sustainability

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The aim of this paper is to apply the concept of marginal vertical income convergence to analyze the influence of the two last economic downturns (2007 and 2020) on the sustainability of the equalization of income levels within the European Union. The methodology used enables us to avoid some restrictions of the classical analysis of income convergence. Income convergence models were estimated using data from the period 1993–2022, excluding the impact of outliers. The results confirm that we can observe the progressive process of the absolute income convergence for EU members, but there are significant differences between countries’ contributions to the process. These differences are caused by different paths of economic growth, and different mean resilience to economic crises, as well as different patterns of income inequalities. Their proper recognition allows us to develop efficient policies aimed at social cohesion, reducing income inequalities (the 10th Sustainable Development Goal), and sustainable economic development. Additionally, the estimated models indicated a definite different impact of the last two economic shocks on the European process of income convergence. The first shock significantly slowed down the income convergence process, while the second one was practically neutral in this context.

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“…Sustainable economic convergence is important not only for the individual countries that benefit from it, but also for the smooth functioning of the European Union [8,67].…”

Section: Discussionmentioning

confidence: 99%