Laggards or performers? CEE vs. PIIGS countries’ catch-up with the Euro area in the last ten years

Tatomir, Cristina F. and Alexe, Ileana (2011): Laggards or performers? CEE vs. PIIGS countries’ catch-up with the Euro area in the last ten years. Forthcoming in: Theoretical and Applied Economics

Abstract

This research paper develops a comparative analysis between the new members states of the European Union (EU) – from Central and Eastern Europe (CEE) – and PIIGS countries (Portugal, Italy, Ireland, Greece and Spain) in terms of economic convergence with the Euro area, in the last decade. In addition, the paper emphasizes the changes in the economic convergence levels determined by the recent international crisis. In order to assess these evolutions, we compute an aggregated index of economic convergence, made up of real and structural convergence indexes. Then, by using cluster methodology, we highlight the similarities between the states in the two groups, CEE and PIIGS, from the economic convergence perspective. The comparative analysis reveals that in 2010 only Estonia, Hungary and Slovenia report resembling characteristics to PIIGS group. We also report an important progress of the countries analyzed, as regards real and structural convergence with the Euro area. However, after a decade of catching-up, Romania remains by far the most distanced country from the Euro area.

• Item Type: MPRA Paper
• Language: English
• Keywords: real convergence, structural convergence, Central and Eastern Europe, PIIGS, clusterization
• Subjects: F - International Economics > F1 - Trade > F15 - Economic Integration; C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C43 - Index Numbers and Aggregation; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies

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