01989cas a2200241 a 4500 AALejournalIMF017836 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484312353 1934-7685 BD-DhAAL BD-DhAAL International Monetary Fund. European Dept. Euro Area Policies : Selected Issues. Washington, D.C. : International Monetary Fund, 2017. 1 online resource (94 pages) IMF Staff Country Reports <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper focuses on the convergence performance of euro area countries before and after euro introduction. The analysis compares per capita incomes across countries, both for the initial group of twelve countries that adopted the euro before 2002 (the so-called EA-12) as well as the current group of 19 euro area members (EA-19). The convergence process has stalled since the introduction of the euro, except for new euro area members which reduced their income gaps vis-a-vis the founding members until their adoption of the common currency. The convergence of income levels is not a prerequisite for a functioning monetary union, but has been considered an important objective of the European economic integration process. Lagging productivity growth in countries with lower initial GDP per capita is found to be the main explanation for the lack of convergence, suggesting that structural reforms can help to restart the convergence process. Mode of access: Internet IMF Staff Country Reports; Country Report ; No. 2017/236 Full text available on IMF http://elibrary.imf.org/view/journals/002/2017/236/002.2017.issue-236-en.xml IMF e-Library