Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/201229 
Authors: 
Year of Publication: 
2013
Series/Report no.: 
ETLA Working Papers No. 14
Publisher: 
The Research Institute of the Finnish Economy (ETLA), Helsinki
Abstract: 
We analyse the Sigma convergence (standard deviation divided by average) of purchasing power adjusted GDP per capita and GDP per hour worked in the European Union. We also link the development in income distribution as measured by Gini coefficients to convergence. With short pauses, there has been a long term trend of GDP per capita convergence in the European Union after 1960. The Great Recession was a shock to the development, and convergence within the EU-15 has suffered considerably. The largest relative declines have occurred in Cyprus, Greece, Italy, Portugal and Spain. On the other hand, the ex-transition countries have mostly continued their catching up. Historically, convergence in the EU has been faster when aggregate GDP growth has been faster. We also find that income disparities measured by Gini coefficients are negatively related to GDP per capita levels. Convergence was not correlated with changes in income distribution in 2000–2011 except for a group of six catching-up countries where we find a positive relation. We also find that there has occurred Sigma convergence in national Gini coefficients
Subjects: 
EU
GDP per capita
productivity
Sigma convergence
Gini coefficient
JEL: 
F15
F43
O15
O47
Document Type: 
Working Paper

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