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Economic Convergence and Structural Change: the Role of Transition and EU Accession

Author

Listed:
  • Rumen Dobrinsky

    () (The Vienna Institute for International Economic Studies, wiiw)

  • Peter Havlik

    () (The Vienna Institute for International Economic Studies, wiiw)

Abstract

Summary This paper analyses the speed and patterns of economic convergence in the new EU Member States of Central and Eastern Europe during transition and the first years of EU membership. After a brief discussion of measurement and data issues, the paper provides stylised facts on growth and convergence in Europe, and explores various convergence measures proposed in the growth literature. It employs several analytical approaches in order to reveal convergence speed and patterns univariate growth regressions, multivariate econometric analysis, including the testing of convergence models and running different growth regressions. The aim is to look at various aspects of convergence processes by using alternate approaches and then, by putting those together, to seek common and distinct features. We confirm that the one-off direct negative effects of the crisis on GDP growth were considerably stronger in the case of NMS. The growth patterns were interrupted and the convergence process slowed down. The paper underlines the significant, sometimes even increasing, heterogeneity of growth, pointing more generally to uneven economic convergence within the EU. This concerns not only the lasting differences between the NMS and the rest of the EU, but also significant dissimilarities between the growth patterns among individual countries within each of these subgroups.

Suggested Citation

  • Rumen Dobrinsky & Peter Havlik, 2014. "Economic Convergence and Structural Change: the Role of Transition and EU Accession," wiiw Research Reports 395, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:rpaper:rr:395
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    File URL: https://wiiw.ac.at/economic-convergence-and-structural-change-the-role-of-transition-and-eu-accession-dlp-3357.pdf
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    References listed on IDEAS

    as
    1. Leon Podkaminer, 2013. "Development Patterns of Central and East European Countries (in the course of transition and following EU accession)," wiiw Research Reports 388, The Vienna Institute for International Economic Studies, wiiw.
    2. Vasily Astrov & Vladimir Gligorov & Doris Hanzl-Weiss & Peter Havlik & Mario Holzner & Gabor Hunya & Michael Landesmann & Sebastian Leitner & Zdenek Lukas & Anton Mihailov & Olga Pindyuk & Leon Podkam, 2012. "Fasting or Feasting? Europe - Old and New - at the Crossroads," wiiw Forecast Reports 10, The Vienna Institute for International Economic Studies, wiiw.
    3. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    4. Benedicta Marzinotto, 2012. "The growth effects of EU cohesion policy: a meta-analysis," Working Papers 754, Bruegel.
    5. Matkowski, Z. & Prochniak, M., 2004. "Real Economic Convergence in the EU Accession Countries," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 1(3), pages 5-38.
    6. Andrew T. Young & Matthew J. Higgins & Daniel Levy, 2008. "Sigma Convergence versus Beta Convergence: Evidence from U.S. County-Level Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(5), pages 1083-1093, August.
    7. Janos Kornai, 2006. "The Great Transformation Of Central Eastern Europe: Success And Disappointment - First Published," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 2(4), pages 11-38.
    8. Monica Raileanu Szeles & Nicolae Marinescu, 2010. "Real convergence in the CEECs, euro area accession and the role of Romania," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 7(1), pages 181-202, June.
    9. Nazrul Islam, 2003. "What have We Learnt from the Convergence Debate?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 309-362, July.
    10. Rusinova, Desislava, 2007. "Growth in transition: Reexamining the roles of factor inputs and geography," Economic Systems, Elsevier, vol. 31(3), pages 233-255, September.
    11. János Kornai, 2006. "The great transformation of Central Eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(2), pages 207-244, April.
    12. János Kornai, 2006. "Velká transformace střední a východní Evropy: úspěch a zklamání
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      ," Politická ekonomie, University of Economics, Prague, vol. 2006(4), pages 435-466.
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    Citations

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    Cited by:

    1. Gül Ertan Özgüzer & Ayla Oğuş-Binatlı, 2016. "Economic Convergence in the EU: A Complexity Approach," Eastern European Economics, Taylor & Francis Journals, vol. 54(2), pages 93-108, March.
    2. Adela Ionescu, 2014. "The European Banking System. Track Record And Achievement," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 2(2), pages 093-102, November.
    3. Ryszard Rapacki & Mariusz Próchniak, 2014. "The Impact of EU Membership on Economic Growth and Real Convergence of the Central and Eastern European Countries," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 39.
    4. Grafström, Jonas & Jaunky, Vishal, 2017. "Convergence of Incentive Capabilities within the European Union," Ratio Working Papers 301, The Ratio Institute.
    5. Manuela Unguru & Razvan Voinescu, 2014. "Drivers Of Long-Term Convergence. Focus On Romania," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 2(2), pages 103-112, November.
    6. Mihaela-Nona Chilian & Marioara Iordan & Carmen Beatrice Pauna, 2016. "Real and structural convergence in the Romanian counties in the pre-accession and post-accession periods," ERSA conference papers ersa16p320, European Regional Science Association.
    7. Vladimir Gligorov & Peter Havlik & Gabor Hunya & Michael Landesmann & Leon Podkaminer & Sandor Richter & Hermine Vidovic, 2016. "Monthly Report No. 1/2016 - Special Issue: Reality Check – wiiw Economists Reflect on 25 Years of Transition," wiiw Monthly Reports 2016-01, The Vienna Institute for International Economic Studies, wiiw.

    More about this item

    Keywords

    economic growth; growth determinants; real convergence; European Union; Central and Eastern Europe;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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