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Europe's growth will have to be golden in yet another sense. Economic prosperity has brought to Europeans the gift of longer lives, and the continent's population has aged a lot over the last five decades. Over the next five, it will age even more by 2060; almost a third of Europeans will be older than 65 years. Europe will have to rebuild its structures to make fuller use of the energies and experience of its more mature population's people in their golden years. These desires and developments already make the European growth model distinct. Keeping to the discipline of the golden rule would make it distinguished. This report shows how Europeans have organized the six principal economic activities trade, finance, enterprise, innovation, labor, and government in unique ways. But policies in parts of Europe do not recognize the imperatives of demographic maturity and clash with growth's golden rule. Conforming growth across the continent to Europe's ideals and the iron laws of economics will require difficult decisions. This report was written to inform them. Its findings the changes needed to make trade and finance will not be as hard as those to improve enterprise and innovation; these in turn are not as arduous and urgent as the changes needed to restructure labor and government. Its message the remedies are not out of reach for a part of the world that has proven itself both intrepid and inclusive.

The creation of ASEAN Free Trade Area (AFTA) in 1992 and decentralization in 1999 mark the state restructuring in Indonesia. This book analyses the impact of state restructuring on regional economic development in Indonesia between 1993 and 2010. Regional economic analysis shows persistent and severe regional disparities throughout the period. Particularly, econometrics study found that decentralization has accelerated regional disparities whilst the AFTA effect is insignificant on regional economic growth. Furthermore, historical institutionalism analysis on two cities - the manufacturing industry in Batam and the creative economy in Bandung - shows that past and embedded local institutions provide the capacity to adapt and create new development paths. The book suggests the importance of local-specific policies that embrace local knowledge and institutions to develop regional specialization and competitive advantage. This book fills the gap in Indonesian literature that lacks studies on the integrated impact of decentralization and trade liberalization, both economically and politically.

The objective of this paper is to examine the convergence of economic activity between the various NUTS 3 regions of the Iberian Peninsula over the period 2000-2019. An analysis of the GDP (PPS) per capita of Spanish and Portuguese provinces was conducted with the help of different usual statistical and econometric methods of σ, β and γ. This was done to confirm the existence or non-existence of economic convergence in the period under analysis. The results revealed the existence of economic convergence between the Portuguese and Spanish provinces. In addition, they showed that more than half of the territory analysed was characterised by a scenario of poverty. El objetivo del presente trabajo es explorar la convergencia de la actividad económica entre las distintas regiones NUTS 3 de la Península Ibérica durante el periodo 2000-2019, a partir de un análisis del PIB (PPS) per cápita de provincias españolas y portuguesas, con ayuda de los diferentes métodos estadísticos y econométricos habituales de σ, β y γ. Para así poder confirmar la existencia o no de convergencia económica en el periodo analizado. Los resultados nos revelan la existencia de convergencia económica entre las provincias portuguesas y españolas. Además de mostrarnos un escenario de pobreza en más de la mitad del territorio analizado.

Recent literature revisits cross-country convergence patterns over the last six decades. Whilst the debate has been about unconditional or conditional convergence, we question whether convergence rates differ across countries. Using the same dataset as in the recent studies of Kremer et al. (NBER Macroecon Annu 36:337–412, 2022) and Acemoglu and Molina (NBER Macroecon Annu 36:425–442, 2022) (GDP per capita for 108 countries over 58 years, 1960–2017), we systematically search models where the degree of heterogeneity varies from the mean group, pooled mean group, fixed effects and pooled estimators of convergence. The Bayesian Information Criterion selects the heterogeneous model whether we use the U.S., a common factor or country-specific trends as the steady state. We estimate a multi-country technological catch-up statistical model using the U.S. as the technological frontier. We show empirically that a failure to allow for heterogeneous rates of convergence creates a bias in the convergence coefficient towards zero. The long-run elasticity to the U.S.—another convergence parameter of interest—associates positively (0.79) with the country’s average growth. Countries that learn from the technological frontier also grow faster.

We evaluate the cross-country convergence of financial development and its relationship with GDP growth. Financial inclusion variables have been widely converged across countries, and the catch-up effect of countries with poor financial coverage mainly drives the convergence. In contrast, financial development measures — including domestic credit, liability, mutual fund size, and stock market capitalization — have diverged since 1985 despite the absolute convergence in GDP and financial inclusion. The GDP growth rates strongly correlate with the change in financial development but not the improvement in financial inclusion.

Corporate Governance In A Globalising World: Convergence Or Divergence? presents a broad and multi-disciplinary debate on corporate governance systems by integrating academic viewpoints, statistical evidence, as well as field surveys. Based on a large number of publications and studies, the opinions of researchers are grouped into three categories: those that believe in a convergence into the direction of the market-oriented model (with the Anglo-American model as the reference base), those that opt for another type of convergence, namely in the direction of a hybrid corporate governance model (based on cross-reference between different leading governance models), and those that do not believe in global convergence but adhere to diversity of governance models.

The middle-income trap is an empirical economic phenomenon characterized by the slowdown in the growth trend of a given country. There are different definitions of a stagnant economy, but they all require an anti-causal computation and are binary by nature. This paper proposes a general approach based on past values of GDP or GNI relative to a high-income country to detect not only middle-income traps but also paths that lead to potential stagnation. We characterize growth patterns and identify the development stage of different countries and regions using the conceptual and mathematical framework of dynamical systems theory. The results show a strong correlation between the fastest-converging economies and their investment attractiveness.

Purpose The purpose of this paper is to analyse whether several groups of European countries are on track for real “conditional” economic convergence in per capita income and the likely speed of convergence. The paper focusses also on the changes of the convergence processes over time. Design/methodology/approach Unlike the simple “absolute convergence”, it explores the concept of “conditional” or “club” convergence. Moreover, it adopts the approach of extending the univariate model to take into account the panel dimension over an extended time interval and endogeneity. Findings A process of real economic convergence has characterised the period under investigation (1995–2016), but, in general, the size and significance of the parameter is greater for the wide European Union (EU) area (EU25 and above) rather than the Eurozone (EZ). However, the crises occurred after 2008 caused most of such lower convergence in the Euro area. Research limitations/implications This paper gives an estimate of the speed/time needed to several groups of European countries (EZ, in particular) to achieve real economic convergence. Future research could further develop the “stochastic” convergence concept. Originality/value This is an analysis of convergence in enlarging EU and EZ for an extended period (including the big crisis period and the subsequent recovery). It shows that EZ experienced a drop in the speed of real convergence after 2008 and converge at lower speed than the EU. As a consequence, a specific budget for EZ would be important to provide adjustment mechanisms after potentially large shocks.

A group of prominent international economists consider what makes for successful convergence—what policies and economic conditions help poor countries catch up to the living standards of rich countries. The question of convergence, or under what conditions the per capita income levels of developing countries can catch up to those found in advanced economies, is critical for understanding economic growth and development. Convergence has happened in many countries and appears to be taking place now in China and India—yet in general per capita income levels in the poorer countries do not converge towards those of richer countries as uniformly as the analytical models predict. Living Standards and the Wealth of Nations, which grew out of a 2003 conference on convergence hosted by the National Bank of Poland, offers detailed theoretical and empirical examinations of what makes for successful convergence. After general discussions of the theoretical requirements for \"rapid catch up\" and the possible link between democracy and growth, the book presents global case studies of both non-EU and EU countries, including a provocative comparison of growth in the transition economies of the CEE (Central and Eastern Europe) nations and the 12 non-Baltic states of the former Soviet Union. It then considers nominal as opposed to real convergence in the European Monetary Union. Taken together, the chapters present a consistent argument that reliance on market forces within an open economy in a stable macroeconomic environment, with assured property rights, is the key to rapid economic growth. Contributors Anders Åslund, Leszek Balcerowicz, Manuel Balmaseda, Iain Begg, John Bradley, Vittorio Corbo L., Stanley Fischer, Leonardo Hernández T., Philip E. Keefer, Olle Krantz, Abel Moreira Mateus, Thomas O'Connell, Stephen L. Parente, Edward C. Prescott, Jacek Rostowski, Isaac Sabethai, Miguel Sebastián, Diarmaid Smyth, Athanasios Vamvakidis, José Maria Viñals, Wing Thye Woo, Nikolai Zoubanov

The literature on convergence in per-capita income across countries has not converged on a common concept of convergence. It may be within a country towards its own steady state or between countries. Between country convergence may be absolute convergence to the same steady state; conditional convergence to country specific steady states, functions of observed variables; or club convergence to different steady states. It may be measured by beta convergence; sigma convergence; or the presence of a common trend. This paper surveys the econometric issues involved in estimating the rate of convergence; testing for convergence; and specifying the unobserved steady state. The survey suggests that rather than there being different ways to measure a single concept, convergence, the different measures are measuring different things.