Development and Finance from issue 2008/4

Péter Halmai

European Integration and Catching-up

- Abstract -

JEL F-15

Convergence and catching-up are not automatic results of EU-accession. The main lessons from economic convergence in the European Union are the following: (1) Convergence is a long-term process approximating 2%, i.e. catching up requires more than 30 years in the event of a GDP level totalling half the average. (2) The catch-up rate varies greatly from country to country, as well as from one period to another. (3) Experiences of former cohesion countries also demonstrate that accession does not automatically generate an accelerated catch-up process, which is first and foremost subject to accomplishing a pragmatic national economic policy supporting both an economic equilibrium and growth. (4) A first glance reveals shorter convergence periods for certain regions than certain countries, if we consider the entire EU. In actual fact, regions within countries – especially in the initial stages – diverge rather than converge. This tendency reflects the bold performance of the more dynamic regions in the countries.

Péter Halmai, DSc, professor of economics (Szent István University)

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