THE CONNECTION BETWEEN REAL AND NOMINAL CONVERGENCE CRITERIA: AN EMPIRICAL APPROACH TOWARDS THE CASE OF NEW MEMBER STATES
THE CONNECTION BETWEEN REAL AND NOMINAL CONVERGENCE CRITERIA: AN EMPIRICAL APPROACH TOWARDS THE CASE OF NEW MEMBER STATES

Summary/Abstract: Although the issue of convergence between the new member states of European Union is an extremely debated subject nowadays, disparities between countries continue to exist and in some cases even to accentuate. The interest in studying the main determinants responsible for differences between growth rates across countries is omnipresent within international policies. One of the main challenges for the new member states is to identify an optimal mix of policies that would ensure high growth rates on one hand and sustainable convergence on the other hand. In order to align to the general standards imposed by the European Union each country should fulfill a set of nominal and real convergence criteria. The main purpose of this article is to test the hypothesis whether these two types of criteria are interconnected with each other and if this proves to be valid what are the main channels involved.

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