Convergence of the GDP Structures of CEE Countries to the Euro Area
Convergence of the GDP Structures of CEE Countries to the Euro Area

Author(s): Nikolay Velichkov, Dimitar Damyanov D.
Subject(s): Politics / Political Sciences, Politics, Economy, National Economy, Supranational / Global Economy, International relations/trade, EU-Accession / EU-DEvelopment
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: economic integration; euro area; structural convergence
Summary/Abstract: This paper attempts to find out to what extent CEE countries are converging towards the euro area in terms of their GDP structures. To achieve our objectives, we use a beta-convergence econometric approach that relies on fixed effects panel data estimation. We estimate a simple equation for all GDP structures and compare the results between two groups of countries. The results obtained from the empirical analysis indicate that there is a process of beta convergence in the GDP structures of the CEE countries towards the euro area. The intensity of this process shows certain specifics both in relation to the countries in and outside the euro area, and in relation to individual structural components. The increasing structural similarity does not exclude the manifestation of certain negative influences on macroeconomic dynamics, which could reduce the intensity of the real convergence process.

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