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Macroeconomic Convergence and Monetary Coordination
Finance & Accounting
Pages 11 (2761 words)
Macroeconomic convergence, development and growth Table of Contents Introduction 3 Economic growth and macroeconomic convergence: an empirical investigation 4 Macroeconomic convergence and financial development 7 Conclusion 11 References 12 Introduction Macroeconomic convergence is a process adopted by the adjoining economies across regions for economic integration amidst themselves.
It is especially found among the financially weaker nations of the world who need to unite to signify their global power. Convergence depends on various factors such as the speed of capital formation, population growth and the presence of efficient economic policies as well as appropriate financial institutions. There are actually two kinds of macroeconomic convergence that nations might indulge into, namely, ‘sigma-convergence’ and ‘beta-convergence’. While sigma-convergence signifies the rate at which the disparity in the income levels of nations is reducing over time, beta-convergence implies the rate at which the poorer nations are growing compared to their richer counterparts (Hossain, 2000). Some of the most vigorous of all attempts towards macroeconomic convergence is noted among the African economies which are highly pestered by the issue of poverty. These nations have realized the importance of macroeconomic convergence to make their meek presences felt and to ensure monetary, financial and political stability as well as security (Zyuulu, 2010). Convergence is highly conducive for economic growth and financial prosperity on account of a variety of reasons. ...
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