- ———. 2003. The Size of Nations. MIT Press.
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- ———. 2007. “PISA 2006: Science Competencies for Tomorrow’s World; Volume 1: Analysis.†Paris: OECD Publishing.
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- “Learning for Tomorrow’s World: First Results from PISA 2003.†Paris: OECD Publishing.
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- ALBERTO ALESINA, GUIDO TABELLINI, and FRANCESCO TREBBI 211 European Commission. 2016. “Future of Europe.†Special Eurobarometer 451, wave 86.1. Brussels: TNS Opinion & Social. http://ec.europa.eu/commfrontoffice/ publicopinion/index.cfm ———. 2017. “White Paper on the Future of Europe: Reflections and Scenarios for the EU27 by 2025.†Brussels.
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- ALBERTO ALESINA, GUIDO TABELLINI, and FRANCESCO TREBBI 213 ———. 2014. “PISA 2012 Results: What Students Know and Can Do; Student Performance in Mathematics, Reading and Science; Volume 1.†Paris: OECD Publishing.
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- Alesina, Alberto, and Paola Giuliano. 2014. “Family Ties.†In Handbook of Economic Growth, Volume 2A, edited by Philippe Aghion and Steven N. Durlauf. Amsterdam: North-Holland.
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- Alesina, Alberto, Paola Giuliano, and Bryony Reich. 2017. “Nation Building and Education.†Working paper.
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- Alesina,Alberto, and Enrico Spolaore. 1997. “On the Number and Size of Nations.†Quarterly Journal of Economics 112, no. 4: 1027–56.
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- Although data availability for the pre-euro period is limited, most institutional indicators point to some convergence in the 1990s, which, however, has been followed by divergence since the introduction of the euro (for additional descriptive evidence, see Papaioannou 2016). Jesús FernándezVillaverde, Luis Garicano, and Tano Santos (2013) discuss in detail how entry in the eurozone delayed, rather than advanced, much-needed institutional reforms of pensions, the courts, politics, and corporate governance, contributing to the slowdown of productivity and competitiveness (see Papaioannou 2015 for a discussion).
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- Although the speed of convergence slowed down in the late 1990s, very few Europeans in 2007 would not highlight convergence on the periphery as one of the EU’s major success. And though one could be critical of the slowdown in catch-up growth, this pattern echoes the patterns of convergence across U.S. states, which was strong for a century (1880–1980) but slowed 220 Brookings Papers on Economic Activity, Spring 2017 down in the 1980s, and especially in the 1990s and 2000s (among many others, see Ganong and Shoag 2016).
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Atkinson, Anthony B. 2015. Inequality: What Can Be Done? Harvard University Press.
- Barro, Robert J. 1991. “Small Is Beautiful.†Wall Street Journal, October 11.
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- Beck, Thorsten, and Geoffrey Underhill, editors. 2017. Quo Vadis? Identity, Policy and the Future of the European Union. London: CEPR Press.
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- Boldrin, Michele, and Fabio Canova. 2001. “Inequality and Convergence in Europe’s Regions: Reconsidering European Regional Policies.†Economic Policy 16, no. 32: 206–53.
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Brandolini, Andrea. 2009. “On Applying Synthetic Indices of Multidimensional Well-Being: Health and Income Inequalities in France, Germany, Italy and the United Kingdom.†In Against Injustice: The New Economics of Amartya Sen, edited by Reiko Gotoh and Paul Dumouchel. Cambridge University Press.
Brunnermeier, Markus K., Harold James, and Jean-Pierre Landau. 2016. The Euro and the Battle of Ideas. Princeton University Press.
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- Calligaris, Sara, Massimo Del Gatto, Fadi Hassan, Gianmarco I.P. Ottaviano, and Fabiano Schivardi. 2016. “Italy’s Productivity Conundrum: A Study on Resource Misallocation in Italy.†European Economy Discussion Paper no. 030. Luxembourg: Publications Office of the European Union. Desmet,Klaus,IgnacioOrtuño-OrtÃÂn,andRomainWacziarg.Forthcoming.“Culture, Ethnicity and Diversity.†American Economic Review.
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- Conditional convergence. The authors’ analysis, as well as previous studies, clearly point out that during the period 1980–2007, the relatively poorer EU countries and regions, mostly in the South (Greece, Portugal, and Spain, but also Ireland), experienced fast output growth and managed to close the income gap with the more advanced nations in the North.
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- European Central Bank. 2015. “Real Convergence in the Euro Area: Evidence, Theory and Policy Implications.†ECB Economic Bulletin, no. 5: 30–45.
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- EVIDENCE FROM THE CRISIS PERIOD, 2008–16 But what about the most recent crisis period? The quick recovery of the countries in the European core after the deep recession of 2008–09, coupled with the prolonged recessions on the periphery, have totally reversed the pattern of convergence in the EU during the period 2008–16. There are sizable differences in output per capita and unemployment across the EU countries, and if anything the gaps between the core and periphery countries have widened.3 A natural follow-up inquiry is examining how institutions and cultural traits have evolved since the onset of the crisis.
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Fazio, Giorgi, and Luciano Lavecchia. 2013. “Social Capital Formation across Space: Proximity and Trust in European Regions.†International Regional Science Review 36, no. 3: 296–321.
Feldstein, Martin. 1997. “The Political Economy of the European Economic and Monetary Union: Political Sources of an Economic Liability.†Journal of Economic Perspectives 11, no. 4: 23–42.
Funke, Manuel, Moritz Schularick, and Christoph Trebesch. 2016. “Going to Extremes: Politics after Financial Crises, 1870–2014.†European Economic Review 88: 227–60.
- Ganong, Peter, and Daniel Shoag. 2012. “Why Has Regional Income Convergence in the U.S. Stopped?†Faculty Research Working Paper no. 12-028. Cambridge, Mass.: Harvard University, Kennedy School of Government.
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Gil-Pareja, Salvador, Rafael Llorca-Vivero, and José MartÃÂnez-Serrano. 2008. “Trade Effects of Monetary Agreements: Evidence for OECD Countries.†European Economic Review 52, no. 4: 733–55.
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- Guiso, Luigi, Helios Herrera, and Massimo Morelli. 2016. “Cultural Differences and Institutional Integration.†Journal of International Economics 99, suppl. 1: S97–S113.
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- Kalemli-Ozcan, Sebnem, Elias Papaioannou, and José-Luis Peydró. 2013. “Financial Regulation, Financial Globalization, and the Synchronization of Economic Activity.†Journal of Finance 68, no. 3: 1179–228.
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Koske, Isabell, Isabelle Wanner, Rosamaria Bitetti, and Omar Barbiero. 2015. “The 2013 Update of the OECD’s Database on Product Market Regulation: Policy Insights for OECD and Non-OECD Countries.†Economics Department Working Paper no. 1200. Paris: OECD Publishing.
- Kunčič, Aljaž. 2014. “Institutional Quality Dataset.†Journal of Institutional Economics 10, no. 1: 135–61.
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Kutan, Ali M., and Taner M. Yigit. 2009. “European Integration, Productivity Growth and Real Convergence: Evidence from the New Member States.†Economic Systems 33, no. 2: 127–37.
- Levchenko,AndreiA. 2007. “Institutional Quality and International Trade.†Review of Economic Studies 74, no. 3: 791–819.
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- MacÃŒÂkowiak, Bartosz, Francesco Paolo Mongelli, Gilles Noblet, and Frank Smets, editors. 2008. “The Euro at Ten: Lessons and Challenges.†Proceedings of the Fifth ECB Central Banking Conference, European Central Bank, Frankfurt, November 13–14.
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- McCarty, Nolan, Keith T. Poole, and Howard Rosenthal. 2016. Polarized America: The Dance of Ideology and Unequal Riches. MIT Press.
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- Nancy, Jacques. 2016. “Major Changes in European Public Opinion Regarding the European Union: Exploratory Study Updated November 2016.†PE no. 596.847. Brussels: European Parliament Research Service.
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- National institutions, 2007–14. Economic divergence has moved in tandemwithinstitutionaldivergence.
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- Norris, Pippa, and Ronald Inglehart. 2009. Cosmopolitan Communications: Cultural Diversity in a Globalized World. Cambridge University Press.
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Olivier, Jacques, Mathias Thoenig, and Thierry Verdier. 2008. “Globalization and the Dynamics of Cultural Identity.†Journal of International Economics 76, no. 2: 356–70.
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- Piketty, Thomas. 2014. Capital in the Twenty-First Century. Belknap Press.
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- Piketty,Thomas, and Emmanuel Saez. 2003. “Income Inequality in the United States, 1913–1998.†Quarterly Journal of Economics 118, no. 1: 1–41.
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- Portes, Jonathan. 2015. “Labour Mobility in the European Union.†In The New Palgrave Dictionary of Economics, edited by Steven N. Durlauf and Lawrence E. Blume. London: Palgrave Macmillan.
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- REFERENCE FOR THE BRUNNERMEIER COMMENT Brunnermeier, Markus K., Harold James, and Jean-Pierre Landau. 2016. The Euro and the Battle of Ideas. Princeton University Press.
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- RESULTS FROM THE PRECRISIS PERIOD, 1980–2007 Alberto Alesina, Guido Tabellini, and Francesco Trebbi have written a provocative, intuitive, and broad paper that provides a thorough analysis of the EU’s economic and cultural dynamics from the 1980s until the onset of the global financial crisis (1980–2007), placing an emphasis on the evolution of cultural hetero geneity. The authors effectively compare results from the EU with the United States, which is often viewed as a successful and not particularly dysfunctional political and economic union. An admirable aspect of the paper is its holistic approach, which allows the reader to see how economic, institutional, and cultural convergence has coevolved.
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- Sigalas, Emmanuel. 2010. “Cross-Border Mobility and European Identity: The Effectiveness of Intergroup Contact during the ERASMUS Year Abroad.†European Union Politics 11, no. 2: 241–65.
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Spolaore, Enrico. 2013. “What Is European Integration Really About? A Political Guide for Economists.†Journal of Economic Perspectives 27, no. 3: 125–44.
- Tabellini, Guido. 2008. “Presidential Address: Institutions and Culture.†Journal of the European Economic Association 6, nos. 2–3: 255–94.
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- THE EUROPEAN TRUST CRISIS Europe has also been experiencing a trust crisis in recent years (Papaioannou 2013; Guiso, Sapienza, and Zingales 2016; Algan and others 2017). My figure 2 (taken from Algan and others 2017) plots the distribution of trust in the European Parliament and national parliaments for 183 European regions (at the NUTS2 level) before and Sources: World Bank, Worldwide Governance Indicators; author’s calculations. 1.5 Index Index Control of corruption Quality of the rule of law 0.5 1.5 0.5 Core countries Former transition countries Periphery countries Core countries Former transition countries Periphery countries
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- These indicators are survey-bases proxies containing perhaps nonnegligible errors. Yet, as shown in my own work (Papaioannou 2016), and the work of CostasArkolakis,Aristos Doxiadis, and Manolis Galenianos (2017), among others, a similar picture emerges when considering other indicators (from the World Bank’s Doing Business project) that measure specific aspects of the institutional environment, such as legal quality, court efficiency, red tape in product markets, and easiness of registering property. Stavroula Karatza and I (2017) tabulate data from the EU Justice Scoreboard that monitor developments in courts across the EU and again find similar patterns. Delays in courts and legal formalism, if anything, have increased in Italy and Greece (and some other countries on the periphery), while there have not been major swings in the North. The North/South wedge has widened.
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Trebbi, Francesco, and Eric Weese. 2015. “Insurgency and Small Wars: Estimation of Unobserved Coalition Structures.†Working Paper no. 21202. Cambridge, Mass.: National Bureau of Economic Research.
- Villaverde, José, and Adolfo Maza. 2008. “Productivity Convergence in the European Regions, 1980–2003:ASectoral and SpatialApproach.†Applied Economics 40, no. 10: 1299–313.
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