We study the relationship between convergence in growth and financial development in the EU throughout 2005-2015, using the time-varying factor model of Phillips and Sul (PS, 2007). Our contribution to the literature is twofold: including the more recent years to assess income convergence and using a comprehensive measure of access, depth and efficiency for financial markets and institutions (IMF, 2016) to benchmark financial systems. We have several results. First, countries approach multiple long-run growth paths; second, integration of financial systems is prevented by clustered financial markets; third, there is a significant association between real income and financial club memberships: countries converging to higher-run growth paths mainly belong to the top-performing financial clubs. This asymmetry can setback economic integration within EU.
Growth and financial development in EU: convergence or divergence? / Cavallaro, Eleonora; Villani, Ilaria. - (2019).
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|Titolo:||Growth and financial development in EU: convergence or divergence?|
CAVALLARO, Eleonora (Primo)
VILLANI, ILARIA (Secondo)
|Data di pubblicazione:||2019|
|Citazione:||Growth and financial development in EU: convergence or divergence? / Cavallaro, Eleonora; Villani, Ilaria. - (2019).|
|Appartiene alla tipologia:||02a Capitolo o Articolo|