Convergence in Italy between the South and the Centre-North after the euro (years 2002-2013)

FARINELLA, DOMENICA;Ofria Ferdinando

2015-01-01

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Abstract

Scholars have two opposite points of view about the EMU. In favour of the EMU, there were those who, inspired by the neoclassical model, argued that the European Community’s economic and social cohesion policy would make possible to eliminate not only the so-called external diseconomies (lack of infrastructures, presence of crime, lack of human capital etc.), but also all those institutional frictions affecting the flexibility and mobility of factors, thereby allowing market forces to balance the per capita income across regions. Against the EMU, we found Keynesian scholars, who, referring to the theory of circular cumulative causation, believed that neoclassical economic policy choices would only have accentuated the dualist system of weak and strong regions. The aim of this essay is a precise attempt to make an ex-post assessment of the effects of the single currency on the economy of the South of Italy. The period considered is the years 2002- 2013. The originality of the paper, compared to previous works is that also considers the years of the recent crisis.