Subject: Real convergence, Central and Eastern Europe, European Union, Panel data models, Fixed-effects estimator
Year: 2016
Title: Determinants of Real Convergence in Central and Eastern Europe
Author: Petrevski, Goran
Author: Gockov, GJorgji
Author: Makreshanska mladenovska, Suzana
Abstract: This paper deals with the process of convergence of the Central and Eastern European (CEE) countries towards the EU and attempts to identify the main driving factors behind this process. In these regards, we first provide an overview of the real convergencethrough an analysis of several economic variables – rate of approximation of real GDP per capita and price levels, trade integration, harmonization of the economic structure and achievements in the labor market. In addition, we offer a formal econometric evidence on the main determinants of the convergence process, based on a panel data for 10 CEE countries during 2000-2015 period, estimated with fixed effects. The results of our study imply that higher savings and investment ratio, higher labour productivity, more efficient labour markets (lower unemployment) and macroeconomic stability (lower inflation and lower budget deficits) are conducive to real convergence. However, quite surprisingly, we find that the close trade integration with the EU is associated with lower level of real convergence.
Publisher: University of “St. Kliment Ohridski” Bitola, Republic of Macedonia
Relation: IBANESS Conference Series
Identifier: oai:repository.ukim.mk:20.500.12188/12359
Identifier: 1. Petreski, G., Gockov, Gj., Mladenovska, M.S. (2016), “Determinants of Real Convergence in Central and Eastern Europe”, Proceedings from International Balkan and Near Eastern Social Sciences Conference Series, 646-658
Identifier: 978-9989-695-56-8
Identifier: http://hdl.handle.net/20.500.12188/12359
