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Convergence in Central and Eastern Europe: Can All Get to EU Average?

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  • Dubravko Mihaljek

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Abstract

Abstract This note examines recent evidence on the convergence of per capita incomes in Central and Eastern Europe. The motivation for revisiting this topic is a revival of interest among policymakers in speeding up the convergence process, after it apparently stalled during the financial crisis of 2008–2012 and the subsequent slow recovery. There are two main findings. First, the choice of benchmarks can make a significant difference for assessments of convergence. Most studies seem to ignore this “fine print” of data. Second, despite disappointments, the goal of convergence remains a useful anchor for economic policy in CEE. Going forward, it would be important to recognise that convergence is a slow process, but nevertheless requires sustained reforms to avoid prolonged periods of stagnation or pronounced booms and busts.

Suggested Citation

  • Dubravko Mihaljek, 2018. "Convergence in Central and Eastern Europe: Can All Get to EU Average?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(2), pages 217-229, June.
  • Handle: RePEc:pal:compes:v:60:y:2018:i:2:d:10.1057_s41294-018-0063-7
    DOI: 10.1057/s41294-018-0063-7
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
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    More about this item

    Keywords

    Convergence; Per capita income; European Union; Central and Eastern Europe; Great Financial Crisis;

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
    • P50 - Economic Systems - - Comparative Economic Systems - - - General

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