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Journal of Economic Integration 2003 March;18(1) :188-213.
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
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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2. Koopmans, T. C. (1965), "On the Concept of Optimal Economic Growth" in The Econometric Approach to Developmental Planning. Amsterdam: North Holland.
3. Sala-I-Martin, X. (1996), "The Classical Approach to Convergence" The Economic Journal 106 (July), pp. 1019-1036.
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