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Behind the Eastern–Western European convergence path: the role of geography and trade liberalization

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  • Adolfo Cristobal-Campoamor
  • Osiris Parcero

Abstract

This paper proposes a 2-block 3-region economic geography model that can account for the most salient stylized facts experienced by Eastern European transition economies during the period 1990–2005. In contrast to the existing literature, which has favored technological explanations, trade liberalization is the only driving force. The model correctly predicts that in the first half of the period, trade liberalization led to divergence in GDP per capita, both between the West and the East and within the East. Consistent with the data, in the second half of the period, this process was reversed and convergence became the dominant force. Copyright Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • Adolfo Cristobal-Campoamor & Osiris Parcero, 2013. "Behind the Eastern–Western European convergence path: the role of geography and trade liberalization," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(3), pages 871-891, December.
  • Handle: RePEc:spr:anresc:v:51:y:2013:i:3:p:871-891
    DOI: 10.1007/s00168-013-0565-1
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    More about this item

    Keywords

    F12; F15; P2;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

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