Inequality in EMU: Is There a Core Periphery Dualism?
Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 6, 2018
26 Pages Posted: 17 Jan 2019
Date Written: December 27, 2018
Income inequality has had a minor role in the European integration process’ institutional framework. This is particularly unfitting given that reducing disparities has been one of the most explicit and firm goals of the EU, which has consequently devoted an increasing share of its budget to regional policy. This issue has potentially relevant policy implications (as often underlined by the OECD reports) because if the European integration has a role in increasing inequalities within member countries it is harmful for social cohesion. This paper intends to assess inequality determinants in EMU countries and whether the European integration process has been itself among them. It performs an empirical investigation on a panel of 12 EMU member States in the period 1980 and 2015. The contribution of this paper to the existing literature in twofold: first, it focuses on the effects of European integration on inequality in EMU countries over the last 25 years, on which the evidence is still scarce. Second, it tries to disentangle the European integration impact on inequality in core and periphery EMU members countries in order to investigate the so called “core periphery dualism” determinants.
Keywords: income inequality, core-periphery dualism, financial integration, trade openness, panel data analysis
JEL Classification: D63, D31, 015, H23
Suggested Citation: Suggested Citation