Behind the Eastern-Western European convergence path: the role of geography and trade liberalization

Adolfo Cristobal-Campoamor and Osiris Parcero

No 1112, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: This paper proposes a 2-country 3-region economic geography model that can account for the most salient stylized facts experienced by Eastern European transition economies during the period 1990-2005. In contrast to the existing literature, which has favored technological explanations, trade liberalization is the only driving force. The model correctly predicts that in the first half of the period trade liberalization led to divergence in GDP per capita, both between the West and the East and within the East. Consistent with the data, in the second half of the period, this process was reversed and convergence became the dominant force.

Pages: 33 pages
Date: 2011-05
New Economics Papers: this item is included in nep-geo, nep-int and nep-tra
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http://repecsrv.uv.es/paper/RePEc/pdf/eec_1112.pdf First version, 2011 (application/pdf)

Related works:
Journal Article: Behind the Eastern–Western European convergence path: the role of geography and trade liberalization (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eec:wpaper:1112

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