Ricerc@Sapienza

In the present research we focus on the issue of growth convergence at both country and regional levels within the EU boundaries. We build on the theoretical and empirical literature on club convergence that points to the role of heterogeneity in initial factor endowments and structural factors in determining multiple long-run growth paths, and use techniques recently proposed in the literature to first assess
convergence/divergence in real per-capita incomes and productivity, and then identify endogenously convergence clubs: the mixture and semiparametric models, and the Phillip and Sul (2007) nonlinear factor model. We then employ alternative methods to assess empirically the factors conditioning club convergence, the strength of club membership, the transitional dynamics and interclub mobility. From our results we derive theory-based policy implications for convergence/divergence within EU. Our research is relevant for understanding the resilience of the integration process to adverse shocks and for highlighting the factors that withhold growth convergence within the EU boundaries, in order to implement the appropriate policies to tackle a multispeed Europe. A special focus will be on the link between migration, and the ensuing cultural diversity, growth and convergence. Among the various mechanisms providing a growth enhancing role for migration and diversity, the analysis will center on their risk sharing implications.