IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/31407.html
   My bibliography  Save this paper

An empirical estimation of Balassa – Samuelson Effect in case of Eastern European Countries

Author

Listed:
  • Paun, Cristian

Abstract

Integration into the European Monetary Union (EMU) and adoption of Euro became a specific objective for Eastern European Countries after their accession into the European Union. This objective implies specific nominal and real economic convergence for these countries within a given period of time (Copenhagen criteria). Nominal convergence measurement is based on well-defined system of economic indicators (Maastricht and Amsterdam criteria). Real convergence refers to real economic performance of a country and it is commonly associated with GDP growth rate and productivity level. From a broader perspective, real and nominal convergence could be seen as complementary. Tensions between real and nominal convergence are tested through Balassa – Samuelson Effect. In this paper it is analyzed the evolution of nominal and real convergence based on a proposed set of indicators and it is estimated Balassa-Samuelson Effect on non-Euro countries.

Suggested Citation

  • Paun, Cristian, 2010. "An empirical estimation of Balassa – Samuelson Effect in case of Eastern European Countries," MPRA Paper 31407, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:31407
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/31407/1/MPRA_paper_31407.pdf
    File Function: original version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/40153/1/MPRA_paper_40153.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Keller, Wolfgang, 2000. "Do Trade Patterns and Technology Flows Affect Productivity Growth?," The World Bank Economic Review, World Bank, vol. 14(1), pages 17-47, January.
    3. Howard Pack, 1994. "Endogenous Growth Theory: Intellectual Appeal and Empirical Shortcomings," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 55-72, Winter.
    4. Rubina Vohra, 1997. "An empirical investigation of forces influencing productivity and the rate of convergence among states," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 25(4), pages 412-419, December.
    5. Sala-i-Martin, Xavier X, 1996. "The Classical Approach to Convergence Analysis," Economic Journal, Royal Economic Society, vol. 106(437), pages 1019-1036, July.
    6. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth : revisiting the evidence," Policy Research Working Paper Series 3004, The World Bank.
    7. Galor, Oded, 1996. "Convergence? Inferences from Theoretical Models," Economic Journal, Royal Economic Society, vol. 106(437), pages 1056-1069, July.
    8. Robert M. Solow, 1994. "Perspectives on Growth Theory," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 45-54, Winter.
    9. Bonfiglioli, Alessandra, 2008. "Financial integration, productivity and capital accumulation," Journal of International Economics, Elsevier, vol. 76(2), pages 337-355, December.
    10. Magnus Blomström & Ari Kokko & Mario Zejan, 2000. "Multinational Corporations and Productivity Convergence in Mexico," Palgrave Macmillan Books, in: Foreign Direct Investment, chapter 9, pages 134-159, Palgrave Macmillan.
    11. Kocenda, Evzen, 2001. "Macroeconomic Convergence in Transition Countries," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 1-23, March.
    12. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(2), pages 385-406, June.
    13. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    14. Gianluca Salsecci & Antonio Pesce, 2008. "Long-term Growth Perspectives and Economic Convergence of CEE and SEE Countries," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 15(2), pages 225-239, September.
    15. Gao, Ting, 2005. "Foreign direct investment and growth under economic integration," Journal of International Economics, Elsevier, vol. 67(1), pages 157-174, September.
    16. De Long, J Bradford, 1988. "Productivity Growth, Convergence, and Welfare: Comment," American Economic Review, American Economic Association, vol. 78(5), pages 1138-1154, December.
    17. M. Alam, 1992. "Convergence in developed countries: an empirical investigation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 128(2), pages 189-201, June.
    18. Iancu, Aurel, 2008. "Real Convergence and Integration," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(1), pages 27-40, March.
    19. János Gács, 2003. "Transition, EU Accession and Structural Convergence," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(3), pages 271-303, September.
    20. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
    21. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 133-162, January.
    22. Rumen Dobrinsky, 2003. "Convergence in Per Capita Income Levels, Productivity Dynamics and Real Exchange Rates in the EU Acceding Countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(3), pages 305-334, September.
    23. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    24. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    25. Gene M. Grossman & Elhanan Helpman, 1994. "Endogenous Innovation in the Theory of Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 23-44, Winter.
    26. Carmela Martín & Ismael Sanz, 2003. "Real Convergence and European Integration: The Experience of the Less Developed EU Members," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(3), pages 205-236, September.
    27. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    28. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mirjana Miletic, 2012. "Estimating the Impact of the Balassa-Samuelson Effect in Central and Eastern European Countries: A Revised Analysis of Panel Data Cointegration Tests," Working papers 22, National Bank of Serbia.
    2. Mirjana Miletić, 2012. "Estimating the Impact of the Balassa-Samuelson Effect in Central and Eastern European Countries: A Revised Analysis of Panel Data Cointegration Tests," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 59(4), pages 475-499, September.
    3. Mirjana Miletic, 2012. "Estimating the Impact of the Balassa-Samuelson Effect in Central and Eastern European Countries: A Revised Analysis of Panel Data Cointegration Tests," Working papers 22, National Bank of Serbia.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miron, Dumitru & Dima, Alina & Paun, Cristian, 2009. "A model for assessing Romania's real convergence based on distances and clusters methods," MPRA Paper 31410, University Library of Munich, Germany.
    2. Rubina Vohra, 1997. "An empirical investigation of forces influencing productivity and the rate of convergence among states," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 25(4), pages 412-419, December.
    3. Iancu, Aurel, 2007. "The Question of Economic Convergence - first part -," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 4(3), pages 5-18, September.
    4. Rubina Vohra, 1998. "Convergence (divergence) and the U.S. states," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 26(4), pages 372-378, December.
    5. Leone Leonida & Daniel Montolio, 2001. "Convergence and Inter-Distributional Dynamics among the Spanish Provinces. A Non-parametric Density Estimation Approach," Working Papers 2001/7, Institut d'Economia de Barcelona (IEB).
    6. de la Fuente, Angel, 1997. "The empirics of growth and convergence: A selective review," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 23-73, January.
    7. Iancu, Aurel, 2009. "Real Economic Convergence," Working Papers of National Institute for Economic Research 090104, Institutul National de Cercetari Economice (INCE).
    8. Ronny Correa-Quezada & Lucía Cueva-Rodríguez & José Álvarez-García & María de la Cruz del Río-Rama, 2020. "Application of the Kernel Density Function for the Analysis of Regional Growth and Convergence in the Service Sector through Productivity," Mathematics, MDPI, vol. 8(8), pages 1-20, July.
    9. Paulo M.M. Rodrigues & Jorge M. L. G. Andraz, 2015. "A Reappraisal of Eurozone Countries Output Differentials," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    10. Florian Straßberger, 1995. "Technischer Wandel und wirtschaftliches Wachstum: Einige jüngere Entwicklungen, empirische Ergebnisse und wirtschaftliche Konsequenzen," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 64(2), pages 200-220.
    11. Rensman, Marieke, 1996. "Economic growth and technological change in the long run : a survey of theoretical and empirical literature," Research Report 96C10, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    12. repec:dgr:rugsom:96c10 is not listed on IDEAS
    13. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    14. Cem Ertur & Julie Le Gallo & Catherine Baumont, 2006. "The European Regional Convergence Process, 1980-1995: Do Spatial Regimes and Spatial Dependence Matter?," International Regional Science Review, , vol. 29(1), pages 3-34, January.
    15. Tunali, Çiǧdem Börke & Yilanci, Veli, 2010. "Are per capita incomes of MENA countries converging or diverging?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(21), pages 4855-4862.
    16. Kenneth Button, 2011. "The Economist’s Perspective on Regional Endogenous Development," Chapters, in: Robert Stimson & Roger R. Stough & Peter Nijkamp (ed.), Endogenous Regional Development, chapter 2, Edward Elgar Publishing.
    17. Eftychia Tsanana & Constantinos Katrakilidis, 2014. "Do Balkan economies catch up with EU? New evidence from panel unit root analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(4), pages 641-662, November.
    18. Agnieszka Głodowska & Bożena Pera, 2019. "On the Relationship between Economic Integration, Business Environment and Real Convergence: The Experience of the CEE Countries," Economies, MDPI, vol. 7(2), pages 1-19, June.
    19. Juncal Cunado & Fernando Perez de Gracia, 2006. "Real convergence in some Central and Eastern European countries," Applied Economics, Taylor & Francis Journals, vol. 38(20), pages 2433-2441.
    20. repec:ath:journl:tome:34:v:2:y:2014:i:34:p:13-21 is not listed on IDEAS
    21. Roberto Ezcurra, 2001. "Convergencia Y Cambio Estructural En La Unión Europea," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 0111, Departamento de Economía - Universidad Pública de Navarra.
    22. Maurseth, Per Botolf, 2001. "Convergence, geography and technology," Structural Change and Economic Dynamics, Elsevier, vol. 12(3), pages 247-276, September.

    More about this item

    Keywords

    EMU; Euro; Optimal Currency Area; Balassa Samuelson Effect;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:31407. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.