Credibility of European economic convergence

J.M. Groeneveld, K.G. Koedijk, C.J.M. Kool

Research output: Contribution to JournalArticleAcademicpeer-review


The authors analyze economic convergence and its relation to European real interest rate differentials using a clustering method on seven macroeconomic key variables for 1979-1995. The results indicate that monetary convergence has progressed considerably but that there is hardly any real convergence in the EU. They also perform pooled nominal and real interest rate regressions with the individual cluster indicators as explanatory variables. The authors find significant positive effects of external (current account) and internal (unemployment ratios, government finance) imbalances on real interest rates. They also group countries according to economic reputation and find that real indicators remain significant for the high-reputation countries.
Original languageEnglish
Pages (from-to)1-24
JournalWeltwirtschaftliches Archiv
Issue number1
Publication statusPublished - 1998
Externally publishedYes


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