Codependence and Convergence in the EC Economies

The objective of this paper is to get some insight into the process of real convergence between European countries. Emphasizing the stationary context of the data and the importance of synchronization of the real performances with Germany, we propose a new concept of convergence based on the notion of codependence introduced by Gouriéroux and Peaucelle (1989). Our empirical analysis produces some interesting results, which do not reject the hypothesis that some degree of the erosion of the credibility for some currencies during the period of the new EMS may be due to the emergence of real divergences with Germany.