“UN-Sustainable” Development Goals as a new dimension of the European monetary union core–periphery dualism

Since 2015, the European Commission has been instrumental in integrating the 17 UN Sustainable Development Goals (SDGs) into targeted economic policies for Member States. Pursuing this broad spectrum of economic, social, and environmental goals could have had significant macroeconomic consequences and redistributive effects between and within European countries. Uneven progress among Member States in achieving the 17 SDGs might have also had a heterogeneous impact on countries’ business cycle trends, thus worsening the preexisting core–periphery dualism observed in the past two decades in some European Monetary Union (EMU) country groups.

In this paper, we use a panel VAR to test whether and how the heterogeneous progress of EMU members toward the SDGs has impacted the business cycle movements of 11 EMU countries during the period 2003–2021. The results confirm that progress toward the achievement of SDGs has been detrimental to business cycle convergence between core and periphery countries and within the periphery.