Income convergence in Europe: Catching up or falling behind?

Citations Over TimeTop 10% of 2012 papers

Abstract

One of the motivations for a country to join the European Union is the belief that this will boost short- and long-run incomes. Researchers have tested the hypothesis of income convergence in different settings using either regression or unit root analysis, with mixed results. In this paper, we use both methods on the same samples over a significant time period. This allows us to judge differences in results across varied time-frames and methodologies. The focus of these tests is on convergence to German and EMU average incomes by Eastern European countries and those within the Euro-zone from 1971–2007. The evidence for convergence is mixed. Among the Euro-zone countries, there is more evidence of convergence in the 1970s and 1980s than recently. There is significant evidence that Eastern Europe experienced convergence and that capital formation was one of the root causes. While the results do not support the hypothesis that joining the EU increases convergence, reforms undertaken in the 1990s by Eastern European countries in preparation for joining may have helped them to “catch up”, even if the act of joining the EU did not directly impact convergence.

Related Papers

• → The Five Falling Contours in Jianyang MinTypological Significances (建陽閩語的聲調模式:兼論五條降拱的類型學意義)(2016)3 cited
• → The Sky is Falling; The Sky is Falling … It Really is Falling!(2006)5 cited
• Is Real GDP Stationary In The Advanced Economies? Evidence From An Unbalanced Panel Unit Root Test(2015)
• The Employment of Fishbone Diagram in Analyzing the Reason of Neurosurgical Patients' Falling-Down(2012)
• → FALLING, FALLING, FALLING(2023)