Keywords: unconditional convergence, beta–convergence, sigma–convergence, time series convergence, Eurozone, Portugal, Ireland, Italy, Greece, Spain, unemployment rate, budget deficit, government gross debt, GDP growth rate, labour productivity growth, price inflation, wage inflation, government debt
Empirical evidence on convergence across the PIIGS member states of the Euro–zone
This paper investigates unconditional convergence of major economic variables across the Euro–zone member states of Portugal, Ireland, Italy, Greece and Spain over the last 30 years. The criteria used for investigating convergence are β–convergence, σ–convergence, and time–series–convergence. The findings show that the unemployment rate, the budget deficit, and the general government gross debt do not converge, but the GDP growth rate, the labour productivity growth rate, the prices inflation rate, and the wages inflation rate converge across the five Euro–zone member states. The findings show that the speed of convergence varies depending on the period of under review (the pre–Maastricht Treaty decade, the post–Maastricht Treaty decade, and the decade after the initiation of the Euro–zone).