| Economic Convergence in the European Union |
Ling Yin, George K. Zestos, Leo Michelis |
Jiangnan University
Christopher Newport University
Ryerson Polytechnic University |
| Copyright ©2003 Journal of Economic Integration |
| ABSTRACT |
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Starting with the Treaty of Rome (1957), the European Union adopted common policies to promote "harmonious economic development and balanced expansion." The paper investigates how successful such policies were, by examining whether there was economic convergence of the real per capita GDP in the EU. Two measures of convergence are employed. The first is s, which is based on the cross standard deviation of the real per capita GDPs of the EU countries; the second is b convergence based on the neoclassical growth model. Both s and b were estimated using EU data for the period 1960-1995. The empirical findings support the hypothesis of economic convergence within the EU except for the 1980-85 sub-period where weak divergence was indicated. |
| Keywords:
Beta (b) | Convergence | Sigma (s) convergence | European Union | Nonlinear Least Squares (NLS) | Seemingly Unrelated Regressions (SUR)
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| REFERENCE |
| 1. |
Jacquemin, A. and Sapir, A. (1988), "European Integration or World Integration" Weltwischaftliches Archiv 124, pp. 127-39. |
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| 2. |
Koopmans, T. C. (1965), "On the Concept of Optimal Economic Growth" in The Econometric Approach to Developmental Planning. Amsterdam: North Holland. |
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| 3. |
Sala-I-Martin, X. (1996), "The Classical Approach to Convergence" The Economic Journal 106 (July), pp. 1019-1036. |
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