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How has the financial crisis affected the fiscal convergence of Central and Eastern Europe to the Eurozone?

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  • Astrid Ayala
  • Szabolcs Blazsek

Abstract

This article reports empirical findings on the convergence of the government debt to Gross Domestic Product (GDP) ratio of seven Central and Eastern European (CEE) member states of the European Union (EU) to the European Monetary Union (EMU) over the period 2000 to 2010. This study tests stochastic and β convergence in a time series framework allowing for two structural breaks identified endogenously. The results help to evaluate the distortions in the fiscal convergence process of the CEE countries after the 2008 global financial crisis and the future accession possibilities of each CEE state conditional on the current levels and trends of the debt/GDP ratios.

Suggested Citation

  • Astrid Ayala & Szabolcs Blazsek, 2012. "How has the financial crisis affected the fiscal convergence of Central and Eastern Europe to the Eurozone?," Applied Economics Letters, Taylor & Francis Journals, vol. 19(5), pages 471-476, March.
    • Handle: RePEc:taf:apeclt:v:19:y:2012:i:5:p:471-476
    DOI: 10.1080/13504851.2011.583212
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    1. Kocenda, Evzen & Kutan, Ali M. & Yigit, Taner M., 2006. "Pilgrims to the Eurozone: How far, how fast?," Economic Systems, Elsevier, vol. 30(4), pages 311-327, December.
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    Cited by:

    1. Nikolay Nenovsky & Kiril Tochkov, 2013. "The Distribution Dynamics of Income in Central and Eastern Europe relative to the EU: A Nonparametric Analysis," William Davidson Institute Working Papers Series wp1063, William Davidson Institute at the University of Michigan.
    2. Athanasios Anastasiou & Nicholas Apergis & Athina Zervoyianni, 2024. "Convergence of public expenditures and revenues in EU28 during 2002–2019: Evidence from club‐clustering analysis before and after the European debt crisis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 1856-1876, April.

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