Stochastic convergence in real personal disposable income in the EU: A note

Abstract

Economic convergence has long been a declared objective of the EU and has been considered the fundamental mechanism for achieving socioeconomic cohesion. Even so, the empirical literature finds a lack of real convergence as geographical clusters have emerged. In this paper, we contribute to the literature on income convergence in the EU by analysing convergence in real disposable income across European countries. In contrast to the previous results on real convergence in the EU, we find that most of the countries are converging to the same equilibrium level.