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Economic Growth as a Factor for Price Convergence in EU Countries

Author

Listed:
  • Vasil Bozev

    (University of National and World Economy, Sofia, Bulgaria)

  • Valentin Bilyanski

    (University of National and World Economy, Sofia, Bulgaria)

Abstract

The article examines the impact of economic growth on the general price level in different countries and that in individual product groups. On this basis, it becomes possible to derive some features of the price convergence process in EU countries for the 1996-2019 period. Emphasis is placed on trends in price levels in Bulgaria, with a special place given to products with administratively set prices and those in which excise duties form a large share of the price. This aims to highlight the direct role of the state in the price convergence of these product groups. The theoretical basis of the study is the Balassa-Samuelson model. The empirical study of the relationship between economic growth and price levels is carried out through regression analysis and panel regressions, with the latter analyzing the change in the strength of the relationship over time and the country-specific characteristics of this relation.

Suggested Citation

  • Vasil Bozev & Valentin Bilyanski, 2021. "Economic Growth as a Factor for Price Convergence in EU Countries," Ikonomiceski i Sotsialni Alternativi, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 75-95, March.
    • Handle: RePEc:nwe:iisabg:y:2021:i:1:p:75-95
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    File URL: https://www.unwe.bg/doi/alternativi/2021.1/ISA.2021.1.06.pdf
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    Citations

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    Cited by:

    1. Rossitsa Rangelova, 2021. "Economic Growth and Development of the Concept of Convergence – Theoretical Basis," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 3-26.

    More about this item

    Keywords

    economic growth; price levels; price convergence; new member states; old member states;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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