Real Convergence in Central and Eastern European EU Member States: Which Role for Exchange Rate Volatility?

Real Convergence, Financial Markets, and the Current Account - Emerging Europe versus Emerging Asia

“…60 Thus, we take annual data, as the short observation period does not allow testing with a panel that contains non-overlapping 5-year period averages of the data for each country, as done in Chinn/Prasad (2003), Gruber/Kamin (2005) and Abiad/Leigh/Mody (2007). 61 Our approach raises the issue of endogeneity. 62 Capital fl ows may be largely endogenous, i.e.…”

“…However, the largest contribution to the persistently high current account surpluses of emerging markets has come from resource-poor Asian countries, which accounted for 60% of the developing and emerging market countries' current account surplus in 2004 (Felipe et al, 2006). For a detailed account of growth processes in both regions, see 4 Schadler et al (2006), Crafts (1999), Arratibel et al (2007).…”

Real Convergence and the Determinants of Growth in EU Candidate and Potential Candidate Countries - A Panel Data Approach

“…We use the perpetual inventory method, i.e. K t = K t-1 (1-δ)+I t , where I t is the real GFCF in year t, and δ is the annual rate of depreciation of the capital stock, assumed to be δ = 0.07 following Arratibel et al (2007). We approximate the initial capital stock levels in 1991 using the ratios of capital stock to GDP provided by Doyle et al (2001) for the Czech Republic (2.8), Hungary (1.9), Poland (1.7), Slovakia (2.6) and Slovenia (2.1).…”

“…(2) Under the second method, we have followed the approach of Arratibel et al (2007), which uses the growth of GFCF as a proxy for the growth of the capital stock. The results are broadly similar to those reported here.…”

“…The paper was inspired by Arratibel et al (2007), and follows the 2 methodology and the structure of that paper to some extent. The analysis presented here differs from Arratibel et al mainly in that it focuses on the EU candidate and potential candidate countries and includes an econometric analysis of conditional convergence in the C/PC5 and the EU10 countries.…”