TY - JOUR
T1 - Institutional quality in the Euro area countries
T2 - any evidence of convergence?
AU - Pérez-Moreno, Salvador
AU - Bárcena-Martin, Elena
AU - Ritzen, Jo
N1 - Funding Information:
This work was partially financed by the European Commission’s DG for Employment, Social Affairs and Inclusion (TC 2-X31-7573) and by the Regional Government of Andalusia (P18-RT-4115).
Publisher Copyright:
© 2020 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2020/7/2
Y1 - 2020/7/2
N2 - Divergence in institutional quality across Euro area countries constitutes a risk for the smooth functioning of the Economic and Monetary Union (EMU), increasing the vulnerability of the Euro to negative economic shocks. In this paper, we examine potential institutional convergence across Euro area countries since the onset of the Great Recession (2008-2017). We focus on a range of institutional aspects closely connected with business performance, both in the public and private sphere. While no significant pattern in the evolution of institutional quality in relation to the initial level (beta-convergence) is observed, there is increasing dispersion (sigma-divergence) over the crisis period (2008-2014) and non-significant (beta- nor sigma-) convergence over the subsequent recovery period (2014-2017). Furthermore, an increasing gap in institutional quality between the core and the periphery countries is revealed, even more pronounced over the recovery period. The findings highlight that EU wide agreements to enhance institutional quality in periphery economies are highly advisable in order to increase the stability of the Euro.
AB - Divergence in institutional quality across Euro area countries constitutes a risk for the smooth functioning of the Economic and Monetary Union (EMU), increasing the vulnerability of the Euro to negative economic shocks. In this paper, we examine potential institutional convergence across Euro area countries since the onset of the Great Recession (2008-2017). We focus on a range of institutional aspects closely connected with business performance, both in the public and private sphere. While no significant pattern in the evolution of institutional quality in relation to the initial level (beta-convergence) is observed, there is increasing dispersion (sigma-divergence) over the crisis period (2008-2014) and non-significant (beta- nor sigma-) convergence over the subsequent recovery period (2014-2017). Furthermore, an increasing gap in institutional quality between the core and the periphery countries is revealed, even more pronounced over the recovery period. The findings highlight that EU wide agreements to enhance institutional quality in periphery economies are highly advisable in order to increase the stability of the Euro.
KW - Institutional quality
KW - convergence
KW - Euro area
KW - core and the periphery countries
KW - CRISIS
U2 - 10.1080/14782804.2020.1779044
DO - 10.1080/14782804.2020.1779044
M3 - Article
SN - 1478-2804
VL - 28
SP - 387
EP - 402
JO - Journal of Contemporary European Studies
JF - Journal of Contemporary European Studies
IS - 3
ER -