Convergence in Emerging Europe: Sustainability and Vulnerabilities
July 1, 2008
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Summary
The emerging European economies have been converging rapidly towards the more advanced European economies in recent years. However, large external imbalances in parts of the region have raised questions about sustainability and concerns about vulnerabilities. Empirical evidence in this paper suggest that the convergence trend of emerging Europe is based on strong fundamentals and is expected to continue, but at a slower pace. Moreover, the convergence path may be volatile as countries with large external imbalances adjust, with risks of a hard landing in some cases.
Subject: Current account balance, Current account deficits, Current account imbalances, External debt, Structural reforms
Keywords: current account deficit, deficits Based, EU harmonization, labor market, production function, real GDP, transition economy, WP
Pages:
30
Volume:
2008
DOI:
Issue:
181
Series:
Working Paper No. 2008/181
Stock No:
WPIEA2008181
ISBN:
9781451870398
ISSN:
1018-5941
