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Real and Nominal Convergence and the New EU Member States - Actual State and Implications

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  • Václav Žďárek
  • Jaromír Šindel

Abstract

This paper analyses the process of nominal and real convergence of the new Member States of the European Union. It also discusses theoretical and methodological issues relating to this process. The importance of nominal and real convergence is underlined in connection with a successful catching-up. The EU-10 economies experienced robust economic growth in recent years, which had a positive impact on the convergence process. Although this favourable development of real convergence (GDP per capita in PPS) is accompanied by a simultaneous price (nominal) convergence (changes in relative prices and a convergence of price levels), the comparative price level is still biased towards lower level in comparison with the per capita income.

Suggested Citation

  • Václav Žďárek & Jaromír Šindel, 2007. "Real and Nominal Convergence and the New EU Member States - Actual State and Implications," Prague Economic Papers, University of Economics, Prague, vol. 2007(3), pages 195-219.
  • Handle: RePEc:prg:jnlpep:v:2007:y:2007:i:3:id:305:p:195-219
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    References listed on IDEAS

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    Cited by:

    1. repec:aio:fpvfcf:v:1:y:2017:i:19:p:136-144 is not listed on IDEAS
    2. Iulia Andreea BUCUR & Oana Ancuta STANGACIU, 2015. "The European Union Convergence In Terms Of Economic And Human Development," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 7(2), pages 256-275, August.

    More about this item

    Keywords

    competitiveness; nominal and real convergence; Balassa-Samuelson effect; relative price level;

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • F15 - International Economics - - Trade - - - Economic Integration
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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