Real Convergence of New EU Members. An Experience for Ukraine

Abstract

E conomic growth is one of the most interesting research area of many economists. One of the most important subject, stemming from growth theory, is the theory of convergence. The main question of research is: do we live in a world in which poor countries tend to grow faster than the rich ones or contrary, in which poor countries stay poor and rich stay rich? Most common way of analysis limits to chosen group of countries, the idea known in literature as clubs. Convergence has many definitions, for purpose of this particular analysis the concept of absolute beta convergence and sigma convergence is used. The research presented in the paper is conducted among new EU members which joined European Union in 2004. The two exceptions are Cyprus and Malta which have different economical, political and cultural feature from other analyzed countries. In addition, analysis includes Ukraine. The degree of convergence is assessed on the basis of chosen economic indicators such as GDP per capita, GDP per capita growth rate, labor productivity growth rate and some auxiliary indicators. As a reference data, time series EU -15 is used. The analysis data derives from The Conference Board and Groningen Growth and Development Centre databases and covers period 1989 - 2006.