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Integration and convergence in the EMU: a complex dynamic

Author(s): Bruno Cabrillac

Date published: Sep 2019

SUERF Policy Note, Issue No 100
by Bruno Cabrillac, Banque de France


JEL-codes: E6, F15, F2, F, F6.
Keywords: EMU, convergence, integration.

Real income convergence in the euro area has stopped during the last decade, notably among the euro area first joiners. While real income convergence is neither a necessary condition, nor a by-product of the EMU, it is an important promise of the EU political project. If, at this juncture, deepening integration could, through stimulating agglomeration effects, generate more real divergence, it could also mitigate its consequences through more public and private transfers as well as a more integrated labor market. Indeed, increasing labor mobility could accelerate specialization and agglomeration effects, on one hand, but could also reduce inequality of opportunity in the EA provided that there is a certain harmonization of the education standards. Finally, what could be done to foster cyclical synchronization among EU economies would also help to foster real income convergence.

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SUERF Policy Note, Issue No 100SUERF Policy Note, Issue No 100

Integration and convergence in the EMU: a complex dynamicWeb version: Integration and convergence in the EMU: a complex dynamic

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