Testing Real Convergence as a Prerequisite for Long Run Sustainability

Marta Christina Suciu, Adrian Petre, Laura Gabriela Istudor, Mircea Ovidiu Mituca, Gheorghe Alexandru Stativa, Diana Mardarovici, Oana Raluca Tofan and Razvan George Cotescu
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Marta Christina Suciu: Faculty of Theoretical and Applied Economics, Doctoral School Economy I, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
Adrian Petre: Faculty of Theoretical and Applied Economics, Doctoral School Economy I, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
Laura Gabriela Istudor: Faculty of Theoretical and Applied Economics, Doctoral School Economy I, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
Mircea Ovidiu Mituca: Faculty of Theoretical and Applied Economics, Doctoral School Economy I, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
Gheorghe Alexandru Stativa: Faculty of Theoretical and Applied Economics, Doctoral School Economy I, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
Diana Mardarovici: Faculty of Theoretical and Applied Economics, Doctoral School Economy I, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
Oana Raluca Tofan: Faculty of Theoretical and Applied Economics, Doctoral School Economy I, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
Razvan George Cotescu: Faculty of Theoretical and Applied Economics, Doctoral School Economy I, The Bucharest University of Economic Studies, 010374 Bucharest, Romania

Sustainability, 2021, vol. 13, issue 17, 1-16

Abstract: The main objective of this research is to estimate the degree of real convergence of the countries that joined the European Union between 2004–2013 as an essential precondition for sustainable accession to the Euro Area. Through this study, we tried to create a clear, real and comparative image for the downward trend in the dispersion of the GDP/capita and the speed by which countries with different integration stages achieve the real economic convergence to equilibrium level. In this respect, we tested real convergence by regression models. Further, in order to verify the robustness of the results we applied a cluster analysis. The main results show that non-Euro Area countries have a tendency to individually reduce income disparities with the Euro Area average, but do not register a convergent economic growth and do not form a homogeneous convergence cluster, unlike the newer Euro Area Member Countries. Another representative result is that the Czech Republic seems to be the best prepared country to adopt the single currency in a sustainable way, while Bulgaria is at the opposite pole.

Keywords: convergence; sustainability; GDP/capita; return of investment; clusters; log-t (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:17:p:9943-:d:629111

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