Convergence in Structure and Productivity in European Manufacturing?

Abstract. We find fast convergence in productivity for 99 three‐digit European industries over the 1985–98 period. Half of any productivity gap is closed on average in about 10–15 years. We explicitly formulate the steady‐state assumptions for structural convergence to hold. Convergence in industrial structure is much slower than productivity catch‐up with a half‐life of around 50 years, a stylized fact which cannot easily be explained by the existing models of trade and growth.