Absolute and Conditional Convergence: A Story about Convergence Clubs and Divergence in the EU

Dimitar Zlatinov and Ilia Atanasov

Economic Studies journal, 2021, issue 2, 39-55

Abstract: We examine beta and sigma convergence in the European Union in 2000-2019. Our study shows that the hypotheses for both beta and sigma convergences are not rejected. While the process of convergence is occurring in the EU it is not fast enough, and it is much more concerned with convergence clubs’ formation instead of community convergence. Our estimations of speed and years of convergence show that some countries, mostly from Eastern and Southern Europe, will need higher growth rates to catch up with the average level of income. Since the global economic and financial crisis of 2008 divergence process in the EU is underway and it threatens the functioning of the euro area. Facing such challenges, the EU needs an Investment Deal to carry out the fundamental idea of the Single Market and foster the process of convergence.

JEL-codes: F43 O47 R11 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:bas:econst:y:2021:i:2:p:39-55

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