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Journal of Economic Integration 2014 March;29(1) :20-63.
DOI: https://doi.org/10.11130/jei.2014.29.1.20
Convergence in the Core Euro Zone under the Global Financial Crisis
Kang-Soek Lee and 
Franceline Mercurelli 
Novancia Business School, Paris & LEO, University of Orléans, Orléans, France
LEO, University of Orléans, Orleans, France
Corresponding Author: Kang-Soek Lee ,Tel: +33 155655103, Email: klee@novancia.fr
Copyright ©2014 Journal of Economic Integration
ABSTRACT
A lack of economic convergence among euro member countries seems to be feeding euro-skepticism. Using a Structural Vector Auto Regression model combined with a time varying correlation analysis, we attempt to test the endogeneity theory for the three core euro members, i.e., France, Germany, and Italy. We provide evidence that the adoption of the euro has increased the symmetry of underlying shocks and accelerated the convergence process within this group. Even though the global crisis of 2007~2009 disturbed the European convergence process, the expected endogeneity effects continue to be generated, and the euro-skepticism is not corroborated.

JEL Classification
C32: Time Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
E42: Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
F44: International Business Cycles
O52: Europe
Keywords: Endogeneity Effect | Convergence | Euro | Structural VAR | Dynamic Correlation
 
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