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Limited Macroeconomic Convergence in Transition Countries

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Author Info
Kocenda, Evzen
Abstract

This paper analyzes performance of the transition economies in the Central and Eastern European (CEE) countries in terms of their convergence in selected macroeconomic fundamentals. The analysis uses monthly data on industrial output, money aggregate (M1), consumer prices and producer prices from 1991 to 1998. The analysis is carried out within distinctive groups of countries based on different trade and geographical arrangements, and uses a panel unit-root test as an econometric tool. In general, we conclude that the transition CEE countries were not successful in achieving a certain degree of natural economic integration among them so far. Certain levels of convergence occurred only for a limited number of countries at the advanced stage of transition process.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2285.

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Date of creation: Nov 1999
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Handle: RePEc:cpr:ceprdp:2285

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Related research
Keywords: Convergence; Economic Integration; Panel Unit-Root Test; Transition;

Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
F15 - International Economics - - Trade - - - Economic Integration
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

References listed on IDEAS
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  1. Ng, S. & Perron, P., 1994. "Unit Root Tests ARMA Models with Data Dependent Methods for the Selection of the Truncation Lag," Cahiers de recherche 9423, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
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  2. Ben-David, D., 1995. "Measuring Income Convergence an Alternative Test," Papers 41-95, Tel Aviv.
  3. John Y. Campbell & Pierre Perron, 1991. "Pitfalls and Opportunities: What Macroeconomists Should Know About Unit Roots," NBER Technical Working Papers 0100, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-85, December. [Downloadable!] (restricted)
  5. Maloney, William F. & Azevedo, Rodrigo R., 1995. "Trade reform, uncertainty, and export promotion: Mexico 1982-88," Journal of Development Economics, Elsevier, vol. 48(1), pages 67-89, October. [Downloadable!] (restricted)
  6. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-51, April. [Downloadable!] (restricted)
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  7. Barro, Robert J, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 407-43, May. [Downloadable!] (restricted)
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  8. Ben-David, D., 1995. "Trade and Convergence Among Countries," Papers 35-95, Tel Aviv.
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  9. Papell, David H., 1997. "Searching for stationarity: Purchasing power parity under the current float," Journal of International Economics, Elsevier, vol. 43(3-4), pages 313-332, November. [Downloadable!] (restricted)
  10. Bernard, Andrew B & Durlauf, Steven N, 1995. "Convergence in International Output," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 97-108, April-Jun. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Maria Piotrowska, 2001. "Macroeconomic shocks across Central European Countries," ERSA conference papers ersa01p147, European Regional Science Association. [Downloadable!]
  2. Sarajevs, Vadims, 2001. "Convergence of European Transition Economies and the EU: What Do the Data Show?," BOFIT Discussion Papers 13/2001, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
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