Table of Contents

Economic Convergence and Divergence in Europe

Economic Convergence and Divergence in Europe

Growth and Regional Development in an Enlarged European Union

Edited by Gertrude Tumpel-Gugerell and Peter Mooslechner

This highly topical book addresses the challenge of economic convergence within Europe, beginning with a thorough review of the theory of growth and related empirical research. Historical and more recent economic developments within the present EU and current accession countries are discussed, along with the design for the process of further integration of accession countries into the EU and the Euro area. Moreover, the potential to achieve a sustainable catch-up process in Western Balkan countries, the Ukraine and Russia is explored, focusing on the task facing the EU in designing proper policies vis-à-vis these countries. The contributors’ varied perspectives ensure that the theories and policies postulated are linked closely with the actual situation in accession countries and offer up-to-date insights.

Introduction: Welcome remarks from the 2001 conference

Gertrude Tumpel-Gugerell

Subjects: economics and finance, regional economics, urban and regional studies, regional economics


Gertrude Tumpel-Gugerell Twelve years after the fall of the iron curtain we still see remarkable differences in real GDP per capita between the accession countries and the member states of the European Union. After the strong recession at the beginning of the 1990s most accession countries managed to generate real growth rates of GDP that lie well above the EU average. At the same time unemployment rates rose to relatively high levels – a consequence of the restructuring process from a planned to a market economy. Here the question might be asked whether the wealth gap is diminishing, and what are the driving forces behind what can be called a ‘convergence process’. This volume aims at shedding a light on the problem of economic convergence between regions and countries with different, often vastly different, income-per-capita levels. It will focus on the theoretical fundamentals, on historical evidence and on challenges for economic policy, offering a forum for discussion on the current ‘best policies’ to foster convergence. CONVERGENCE THEORY The neoclassical model of economic growth is the standard starting point among the theoretical approaches to explaining economic convergence. The neoclassical model postulates that countries which are identical in terms of demographic development, saving habits and production technologies but differ in terms of their initial factor endowments display a growth differential and reach the same level of output after convergence in factor inputs has been achieved. Hence the model predicts real convergence, meaning the ‘catching up’ of emerging...