In this paper we explore convergence of real per capita output across the European Union (EU) countries as well as the transitional behaviour of possible underlying factors that are responsible for any convergence or divergence pattern. The new panel convergence methodology developed by Phillips...

The conventional narrative for the European debt crisis stresses three factors, namely, bad policies and profligacy in the afflicted countries –mostly southern ones, flaws in the EMU design, and wise policies in the northern frugal countries. This paper argues that the root causes of the...