The literature on policy convergence has identified numerous facets and causal drivers of convergence. Distinguishing four dimensions of convergence (object, benchmark, drivers and directed process) helps clarify why and in what form policy convergence may occur (or not). Thus, depending on, for example, the object of analysis (policy outcome or instruments used), the same empirical case may give rise to opposing assessments. Furthermore, both economic and political drivers are necessary to account for successful policy convergence: economic convergence partly explains why countries may face similar problems, and political mechanisms explain why they might choose similar policies to solve a given problem. This article illustrates the multifaceted character of convergence for the dynamic field of renewable energy policies in the European Union. The empirical results indicate temporary convergence in the case of policy support instrument choices and conditional convergence in terms of renewable shares. However, the results suggest divergence of public R&D subsidies targeting renewables.

We analyze the role of the lending-deposit interest rate spread in the dynamics of the current account in developing countries. For that purpose, we extend the standard perfect-foresight intertemporal model of the current account for the existence of the interest rate spread and simulate the convergence path of developing economies. This model helps explain why in many cases it is optimal for a fast-growing, low-income country to run a balanced current account.