Middle income convergence trap phenomenon in CEE countries

Barbara Brixová, Anna Tykhonenko, Ľubica Štiblárová and Marianna Siničáková

Post-Communist Economies, 2026, vol. 38, issue 5, 543-565

Abstract: This study examines the Middle-Income Convergence Trap (MICT) in Central and Eastern European (CEE) countries by analysing their economic trajectories and the factors shaping their convergence towards advanced EU members. Using data from 1995 to 2022 and a Bayesian shrinkage estimator, the results reveal significant heterogeneity in country-specific convergence speeds. Bulgaria and Romania achieve the fastest catch-up dynamics (β ≈ 0.058; half-life 5.2 years), while Slovenia and the Czech Republic converge at much slower rates (β ≈ 0.054; half-life 5.6 years), comparable to high-income EU members. These slower speeds suggest that both countries may be approaching the MICT. Complementary dynamic fixed effects estimates further identify trade openness, human capital, and institutional quality as key drivers of convergence, while public debt is associated with increased stagnation risks. The findings underscore the need for comprehensive policy strategies that promote innovation, enhance education systems, and improve governance.

Date: 2026
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DOI: 10.1080/14631377.2026.2634647

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