Convergence across the PIIGS member-states of the Euro-zone

Abstract

This paper investigates unconditional and conditional convergence of GDP growth rate, labour productivity growth rate, unemployment rate, prices inflation rate, wages inflation rate, budget deficit, and government gross debt across the Euro-zone member-states of Portugal, Ireland, Italy, Greece, and Spain over the last thirty years. The findings showed that the speed of convergence varies depending on the period of reference (pre-Maastricht Treaty decade, after Maastricht Treaty decade, and after the initiation of the Euro-zone decade). Budget deficit and general government gross debt showed some convergence in the pre-Maastricht Treaty decade only.