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The Bumpy Road of Convergence: the Catching Up Experience in Portugal, Spain and Greece

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Author Info
AIGINGER, K () (Austrian Institute of Economic Research WIFO. P.O. Box 91 A-1103 Vienna. Austria)

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Abstract

This paper investigates how Portugal, Greece and Spain have experienced the process of catching-up over the last forty years. The primarily descriptive analysis shows how slow and bumpy convergence to the European level of income has been for these three southern peripheral European countries (SPEC). Performance is analysed against the background of expectations for a rather smooth and continuous convergence process, as expressed by many models of economic growth, implying that countries with lower income levels will grow faster than high income countries. The analysis suggests that aside from the variables modelled in simple growth models, economic policy, shocks, institutions and non economic variables also play an important role. The experience of peripheral countries is important for predicting the expected speed of convergence for the new member countries which joined the EU in 2004, since they now have a gap in GDP per capita which is similar to the one the peripheral countries had in 1960. On the positive side the paper shows that all peripheral countries performed better than the European average specifically in the nineties, partly in continuation and partly in renewal of the convergence trend. By 2004, all three countries had halved the gap relative to 1960, with Spain coming closest to the EU average. Este artículo estudia como Portugal, Grecia y España han experimentado el proceso de convergencia en los últimos 40 años. El análisis descriptivo primario muestra una convergencia lenta y desigual al nivel de renta europeo por parte de estos tres países de área periférico sur. Su evolución es analizada mediante el conocimiento y expectativas de los modelos económicos de crecimiento que implican mayores ritmos de crecimiento en los países con menos nivel de ingreso que aquellos de renta más alta. El análisis sugiere que variables modelizadas en modelos sencillos de crecimiento, política económica, shocks, variables institucionales y no económicas juegan un papel importante. La experiencia de los países periféricos es importante para predecir la velocidad esperada de convergencia en el caso de los nuevos miembros que se adhieren en 2004, además cuando ellos tienen un diferencial de PIB per cápita similar al de los tres países en estudio referido al año 1960. El artículo muestra como la actividad de las tres economías periféricas mejora significativamente más rápido que el promedio de la Unión Europea en los años noventa caminando hacia la convergencia. Para 2004, los tres países han reducido a la mitad la brecha de 1960 y España se ha aproximado claramente al promedio de la UE.

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Article provided by Estudios de Economía Aplicada in its journal Estudios de Economía Aplicada.

Volume (Year): 22 (2004)
Issue (Month): (Diciembre)
Pages: 1-22
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Handle: RePEc:lrk:eeaart:22_3_4

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Related research
Keywords: Convergence; Catching Up; Periphery; Performance; Economic Growth;

References listed on IDEAS
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