This paper explores whether similarities in production structures have been an important determinant of business cycle co-movement in the Euro Area. I construct an index of cross-country differences in industry composition using value added data from 62 sectors. Then I test whether this...

Euro area countries exhibited modest convergence prior to the financial crisis and diverged thereafter. Such divergence has been examined from many angles, and various narratives of the crisis have developed. Surprisingly, the gradual transformation of the economic structures of euro area...