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Regional Convergence in the European Community

Author

Listed:
  • Gouyette, Claudine
  • Neven, Damien J
Abstract
This paper assesses convergence in output per head across regions in the European Community (EC), for the period 1975 90. We use three alternative methodologies to measure convergence, which yield consistent results. We observe that there are strong differences in the pattern of convergence across sub-periods and across subsets of regions. If Southern Europe seemed to catch up in the early 1980s, it stagnated, at best, in the second part of the 1980s. The regions in Northern Europe, on the other hand, tended to stagnate or diverge in the first part of the 1980s but converge strongly thereafter. This pattern is consistent with the view that North European countries have adjusted better to the main change in policy regimes which occurred in the mid-1980s, namely the implementation of the Single Market programme and the entry of Spain and Portugal into the EC in 1985. This evidence also lends support to the view that trade liberalization can exacerbate disparities. Finally, our evidence indicates that the distinction between the North and the South of the EC is likely to be more relevant in the analysis of growth patterns than the distinction between the centre and the periphery. Preliminary evidence on migration indicates that the population in the Southern regions responds much more slowly to wage and unemployment differences. This may partly explain why Southern regions have not converged after 1985.

Suggested Citation

  • Gouyette, Claudine & Neven, Damien J, 1994. "Regional Convergence in the European Community," CEPR Discussion Papers 914, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:914
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    References listed on IDEAS

    as
    1. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
    2. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    3. Breitung, Jörg & Meyer, Wolfgang, 1991. "Testing for Unit Roots in Panel Data: Are Wages on Different Bargaining Levels Cointegrated?," Hannover Economic Papers (HEP) dp-164, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
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    More about this item

    Keywords

    Convergence; European Community; Regions;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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