Real Convergence in Central, Eastern and South-Eastern Europe: A Central Banker’s View

Abstract

Central bankers are used to discussing nominal convergence. It is at the heart of their main task, maintaining price stability. It is also at the heart of the Maastricht criteria on the adoption of the euro. This chapter, however, focuses on the other side of the coin, namely real convergence. There are three reasons for this. First, catching-up is the main goal of all the countries in Central, Eastern and South-Eastern Europe. Second, real convergence has gained momentum in recent years, also in countries where progress had been slower in the 1990s. Third, real convergence has important implications for nominal convergence.KeywordsMonetary PolicyCapita IncomeTotal Factor ProductivityCurrent AccountEuro AreaThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.