Structural reforms and regional convergence

Natasha Xingyuan Che, Antonio Spilimbergo, 11 July 2012

A major cause of the Eurozone crisis is the difference in income and productivity between the core and the periphery. This column presents evidence suggesting that structural reforms can be instrumental in fostering the development of lagging regions within a country. It argues that this in turn can accelerate the rate of convergence across countries within a currency union.

The Eurozone crisis is at heart a crisis of failed regional convergence and lack of structural reforms. The euro was supposed to facilitate a rapid convergence in the level of income and, most importantly, of productivity across countries.

Topics: Europe's nations and regions, Global economy
Tags: Eurozone crisis, regional convergence, structural reforms

Login or register to post comments
Read more
7200 reads

A different country: Russia’s economic resurgence

Lúcio Vinhas de Souza, 13 June 2008

Russia has enjoyed impressive economic performance in recent years. This column takes stock of its success, identifies its growth drivers, and highlights the need for microeconomic and structural reforms.

Russia is now once again one of the ten largest economies in the world.¹ Moreover, Russia is the third largest EU trade partner and one of its essential energy suppliers. This recovery makes Russia an economic – and political – actor that we cannot ignore.