Real convergence in the new Member States of the European Union (Shorter and longer term prospects) (original) (raw)

Nominal and real convergence in the new member states (longer-term perspectives)

Bulletin of the Transilvania University of Brasov. Series V : Economic Sciences, 2011

The advancement of nominal and real convergence in the process of EU adaptation is of special importance. The paper studies the main factors of convergence processes in detail. It pays special attention to the analysis of catch-up processes. The paper uses the concepts of the growth theories in order to describe the real convergence processes. Besides the supply side approach (growth accounting, production function), it focuses highly on the demand side and the factors playing an important role in the newest growth theories (trade, macroeconomic policies, institutional system etc.).

Nominal and real convergence in the new EU Member States

2012

The advancement of nominal and real convergence in the process of EU adaptation is of special importance. The paper studies the main factors of convergence processes in details. It pays special attention to the analysis of potential growth processes Detailed quantitative analysis is carried out covering the last two decades. The paper uses the concepts of the growth theories in order to describe the real convergence processes. Sustainable convergence assumes that per capita potential growth rate of the less developed countries should exceed continously the indicator of developed countries. The financial and economic crisis of 2008 has resulted, however, in a fundmentally new situation as regards these issues. Since accession the new Member States have been following transition paths leading to substantial convergence. Yet the pace of this catch up will dwindle over time and may eventually stop-assuming that there are no changes in the policies. After rapid initial convergence the EU-10 countries will increasingly constitute a stagnating "convergence club". The accession to the stability oriented EMU provides remarkable long term advantages for the NMSs. At the same time important new challenges need to be responded to also in the context of the catch up. The fulfilment of the nominal convergence criteria per se is not enough to ensure a robust long term economic performance in the monetary union. Therefore, the promotion of fiscal and structural policies is required also in the course of the euro-adoption. The basic condition for the real economic convergence is considered the approach among the structure of the economies that might be promoted also by transfers of the cohesion policy. Mid-term and long-term simulations imply the slow down of European convergence processes and the full stop of convergence in certain countries. All these are significant challenges for the European integration model (single market, Economic and Monetary Union.

Convergence crisis: economic crisis and convergence in the European Union

International Economics and Economic Policy, 2012

The success of the integration process of the new EU Member States is reflected by the convergence performance. Sustainable convergence assumes that potential growth rates of the less developed countries continuously exceed the dynamics of the potential output of the developed countries. However, the financial and economic crisis of 2008 has resulted in a fundamentally new situation as regards these issues. This paper considers real convergence, catch-up processes and in terms of these the main economic growth trends. The study focuses mainly on the potential growth trends. The recession has, however, affected the individual countries to different degrees. The study classified the Member States into four groups based on the initial circumstances and the vulnerability originating from them; these are 'Developed' countries and 'Convergence' countries, three groups of the latter are 'Mediterranean' countries, 'Catch-up' countries and 'Vulnerable' countries. Potential growth and the contribution of the individual growth factors might follow significantly different paths in these country groups. The convergence countries might face especially great challenges. Potential growth rate of the 'Convergence' countriesaccording to simulations-is expected to recover less in the mid-term, than that of the 'Developed' countries, i.e. convergence slows down, it might come to a halt or even divergence might occur in certain countries. It might result in a 'Convergence Crisis' particularly in certain 'Mediterranean' and 'Vulnerable' new Member States. Also, longer term simulations indicate that the European convergence processes might slow down and stop in certain countries. These trends may have significant effects on economic policies facilitating potential growth. We apply extensive quantitative analysis, production function and growth accounting approaches in the study.

Real convergence in the new eu member states

Prague Economic Papers, 2008

This paper presents the analysis of unconditional and convergence among the ten European countries that accessed the European Union in 2004. Unconditional convergence means that the less developed countries (with lower GDP per capita) grow faster than the more developed countries (with higher GDP per capita). convergence exists when income differentiation among economies decreases over time. Our results confirm the existence of both types of convergence in the second half of the 1990s and the 2000s. The poorer New EU Member States grew generally faster than the richer New EU Member States. As a result, the income gap among these countries has decreased (although it still remains quite large). The convergence occurred at the rate of 2.87% in the years 1995-2006 and 3.23% in 1996-2006. This result is very similar to the results of other analyses on the subject.

Nominal, Structural and Real Convergence of the EU Candidate Countries’ Economies

Journal of Central Banking Theory and Practice

Despite the significant academic interest in the economic cohesion, the various aspects of convergence and the ways they can be measured still remain theoretically unclear. These are issues of extreme political significance, especially for countries aspiring for EU and euro area membership. The goal of this paper is to consolidate a variety of theoretical views on the convergence and its measurement and use it as the basis to assess the progress and the current state of economic convergence to the EU of the four candidate countries. The interrelation between the three forms of convergence in the different phases of the economic cycle is studied and the slobs in the ways the convergence is measured are outlined. The study reveals large differences between the candidate countries in achieving convergence with the EU. Their experiences do not confirm the positive relationship between nominal and real convergence. The structural convergence considered as convergence of sectoral structur...

The Intensity of Convergence Process in the European Union

Economic Analysis, 2014

The objective of this research is to analyze the differences between Romania and the European Union regarding the convergence process. In this paper we were interested in determining the forecasting horizon for which Romania, in certain conditions, might have a value of GDP per capita that is closer to the average of EU (25 countries) and we obtained that 18 years are necessary for Romania to achieve the convergence compared to EU average of GDP per capita. The co-integration approach suggested that in the last 15 years there is a divergence of the Romania economic growth and the EU-25 average. This research might be developed by taking into account other measures of economic convergence.

Real Economic Convergence – European and National Dimension

2009

The effects of European integration upon the support to economic and social development in the EU Member States, upon the convergence process and bridging up the gaps between the Member States represents a field of particular interest, both for researchers and for practioners. In Romania, the governmental policy with regard to the economic-social convergence seems to have a relatively diffuse formulation, being rather included in the regional development policy, for which the Convergence Program 2008-2011 was designed.

Multi-speed Europe? An Analysis of the Real Convergence within the European Union

KnE Social Sciences, 2020

Reaching an appropriate level of economic, social and territorial convergence has been a strategic goal for European policy and decision-makers. The author’s first assumption is that although in the early stages of the regional project, the Member States had similar growth and development levels, with the advancement of the integration process, the development asymmetries increased. In this paper, the authors stress the fact that the European decision-makers and researchers have become more and more interested to study if the Member States of the European Union meet the criteria for certain types of convergence: nominal, real, legal, structural and institutional. This paper brings to the fore-front the process of real convergence, trying to respond to the question if the Member States are catching-up, or are diverging. Moreover, taking into consideration the enlargement of the European Union with the countries from Central and Eastern Europe, we have studied the main trends within t...

The European Journal of Comparative Economics

integration

The success of the integration process of the new EU Member States is reflected by their nominal and real convergence performance. These tendencies are of special importance considering further enlargement of the Eurozone. The financial and economic crisis of 2008 has resulted, however, in a fundamentally new situation as regards these issues. The paper considers the experiences gained in real convergence, the catch-up processes and their future prospects. As for nominal convergence, only those factors were analysed which affect real convergence directly. In particular, the analysis focuses on the sustainability of the convergence processes. The possible trends of longer term growth and convergence processes are presented based on a qualitative analysis representing the supply side approach. 3 The analysis is aimed at revealing potentialnot insignificant-risks and threats.