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

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  • Dimitar Zlatinov
  • Ilia Atanasov

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.

Suggested Citation

  • Dimitar Zlatinov & Ilia Atanasov, 2021. "Absolute and Conditional Convergence: A Story about Convergence Clubs and Divergence in the EU," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 39-55.
    • Handle: RePEc:bas:econst:y:2021:i:2:p:39-55
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    References listed on IDEAS

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    Cited by:

    1. Stela Raleva, 2023. "Characteristics and Factors of Economic Growth in Bulgaria (1970–2008)," Proceedings of the Centre for Economic History Research, Centre for Economic History Research, vol. 8, pages 209-221, November.
    2. Ignat Ignatov, 2023. "Convergence Determinants and Club Formation in the EU over 1999-2021," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 37-63.
    3. Nedyalko Nestorov & Petia Branzova, 2022. "Sustainability of Production and Export of Main Cereal and Oil Crops from Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 8, pages 146-171.

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    More about this item

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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