An Empirical Analysis of Income Convergence in the European Union

Applied Economics Letters (Impact Factor: 0.23). 01/2010; 18(1001). DOI: 10.1080/13504851.2011.560104
Source: RePEc

ABSTRACT In this paper, we investigate the convergence process within the European Union (27 countries). More particularly, we study the convergence process of the new entrants from Central and Eastern Europe and of the 15 Western countries between 1990 and 2007. Applying a panel approach to the convergence equation derived by Mankiw et al. (1992) from the Solow model, we highlight the existence of heterogeneity in the European Union and show that new entrants and former members of the European Union can be seen as belonging to significantly differ ent groups of convergence. The existence of heterogeneity in the European Union or the Eurozone might affect their stability as the recent Greece’s sovereign debt crisis illustrates it.

Download full-text


Available from: Laurent Cavenaile, Aug 05, 2015
  • Source
    • "El cuadro 1.1 muestra que a nivel internacional se ha encontrado evidencia muy variada, predominando la existencia de divergencia absoluta, convergencia condicional para países de áreas económicas comunes y convergencia heterogénea o clubes de convergencia. Similarmente, Azomahou et al. (2011), Cavenaile and Dubois (2011) y Crespo- Cuaresma et al. (2008) encuentran convergencia entre estados de la Unión Europea. Estos últimos casos constituyen una especie de " hibrido " , dado que no son trabajos de convergencia regional, pero sí a nivel de regiones económicas que engloban a varios países. "
    [Show abstract] [Hide abstract]
    ABSTRACT: El trabajo presenta un análisis empírico sobre la convergencia para América Latina durante el periodo 1960-1998, por medio de estimaciones de datos de panel. La evidencia encontrada no indica la presencia de convergencia absoluta ni condicional, ni tampoco la existencia de clubes de convergencia. A su vez, los resultados de las estimaciones realizadas con efectos fijos muestran que no existe convergencia condicional, lo que sugiere que cada economía converge a su propio estado estacionario.
  • [Show abstract] [Hide abstract]
    ABSTRACT: Previous studies focusing on the intra-distribution dynamics analysis have usually computed, in a Markov chain framework, discrete-time transition matrices. Such an approach, however, can involve some limitations, especially when using stock variables. In order to illustrate the importance of the time-scale issue when estimating transition matrices, this paper applies both discrete and continuous-time approaches to a set of cross-national European data on per capita wealth for the period 2000–10. The results reveal, on the one hand, that the continuous-time estimation provides a most accurate estimation of transition probabilities and, on the other, that the differences between both approaches are especially remarkable in the long-term equilibrium distribution.
    Bulletin of Economic Research 02/2013; DOI:10.1111/boer.12002 · 0.19 Impact Factor
  • [Show abstract] [Hide abstract]
    ABSTRACT: This paper explores empirically the issue of income convergence for the Balkans over the period 1994–2011 and the investigation relies on income differentials from both the averages of the European Union’s-15 (EU-15) and the European Union’s-24 (EU-24) as well as within the Balkan group. The adopted methodology deploys the non stationary panel unit root framework to cope with the problem of limited sample providing more reliable insight and, in particular, the analysis uses the univariate and panel minimum Lagrange Multiplier (LM) unit root tests, suggested by Lee and Strazicich (2003, 2004) and Im et al. (2005), that accounts for one and two endogenously determined structural breaks. The overall evidence is in favor of catching up with the EU benchmark cases as well as in favor of convergence within the Balkan area. However, disparities for some countries are confirmed.
    Empirica 03/2013; DOI:10.1007/s10663-013-9222-2
Show more