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Convergence between the Baltic and the Nordic economies: Some reflections based on new data for the Baltic countries

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Abstract

This short paper uses recent estimates of GDP per capita for the Baltic countries for the 1919-2020(22) period to test for convergence between the Baltic and the Nordic economies. Drawing from the methodology used in Bernard and Durlauf (1996) and Greasley and Oxley (1997), we utilise a time-series approach to test for bivariate convergence between the various Baltic and Nordic economies. We find some evidence of conditional convergence and catching up for the interwar period, 1919-1939 and the post-Soviet era 1993-2022, when for the communist growth period until 1988 we find no trace of convergence, when thereafter during the last years of communism, the Baltic economies went into a severe and devastating recession.

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  • Bruno, Lars Christian & Grytten, Ola Honningdal, 2024. "Convergence between the Baltic and the Nordic economies: Some reflections based on new data for the Baltic countries," Discussion Paper Series in Economics 5/2024, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2024_005
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    File URL: https://openaccess.nhh.no/nhh-xmlui/handle/11250/3127200
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    1. Ola Honningdal Grytten, 2022. "Revising growth history: new estimates of GDP for Norway, 1816–2019," Economic History Review, Economic History Society, vol. 75(1), pages 181-202, February.
    2. Bernard, Andrew B. & Durlauf, Steven N., 1996. "Interpreting tests of the convergence hypothesis," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 161-173.
    3. Ola Grytten & Zenonas Norkus & Jurgita Markevičiūtė & Jānis Šiliņš, 2022. "Can the economic growth of interwar Latvia be estimated by contemporary national accounts?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 22(2), pages 90-109.
    4. Bernard, Andrew B & Durlauf, Steven N, 1995. "Convergence in International Output," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 97-108, April-Jun.
    5. Lars Bruno & Jari Eloranta & Jari Ojala & Jaakko Pehkonen, 2023. "Road to unity? Nordic economic convergence in the long run," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 71(3), pages 229-246, September.
    6. David Greasley & Les Oxley, 2010. "Cliometrics And Time Series Econometrics: Some Theory And Applications," Journal of Economic Surveys, Wiley Blackwell, vol. 24(5), pages 970-1042, December.
    7. Zenonas Norkus & Jurgita Markeviciute & Ola Grytten & Janis Šilinš & Adomas Klimantas, 2024. "Benchmarking Latvia’s economy: a new estimate of gross domestic product in the 1930s," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 18(1), pages 251-325, January.
    8. Les Oxley & David Greasley, 1999. "A Nordic convergence club?," Applied Economics Letters, Taylor & Francis Journals, vol. 6(3), pages 157-160.
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    More about this item

    Keywords

    Baltic; Scandinavia; economic growth; convergence; historical national accounts;
    All these keywords.

    JEL classification:

    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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