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Does Monetary Union Membership Affect Convergence in the European Union?

Dzenita Siljak
Dzenita Siljak
 e 
Sándor Gyula Nagy
Sándor Gyula Nagy
   | 24 lug 2021
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Pubblicato online: 24 lug 2021
Pagine: 135 - 157
DOI: https://doi.org/10.2478/danb-2021-0010
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© 2021 Dzenita Siljak, Sándor Gyula Nagy, published by Sciendo
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Figure 1

Absolute convergence of the Eurozone new Member States towards the EU-14+1 in the period 2004–2018 Source: Authors’ calculations based on World Bank data
Absolute convergence of the Eurozone new Member States towards the EU-14+1 in the period 2004–2018 Source: Authors’ calculations based on World Bank data

Figure 2

Absolute convergence of the non-Eurozone Member States towards the EU-15 in the period 2004–2018 Source: Authors’ calculations based on World Bank data
Absolute convergence of the non-Eurozone Member States towards the EU-15 in the period 2004–2018 Source: Authors’ calculations based on World Bank data

Figure 3

Absolute convergence of the Eurozone new Member States towards the EU-14+1 in the period 2009–2013 Source: Authors’ calculations based on World Bank data
Absolute convergence of the Eurozone new Member States towards the EU-14+1 in the period 2009–2013 Source: Authors’ calculations based on World Bank data

Figure 4

Absolute convergence of the non-Eurozone new Member States towards the EU-14+1 in the period 2009–2013 Source: Authors’ calculations based on World Bank data
Absolute convergence of the non-Eurozone new Member States towards the EU-14+1 in the period 2009–2013 Source: Authors’ calculations based on World Bank data

Figure 5

Absolute convergence of the Eurozone new Member States towards the EU-14+1 in the period 2014–2018 Source: Authors’ calculations based on World Bank data
Absolute convergence of the Eurozone new Member States towards the EU-14+1 in the period 2014–2018 Source: Authors’ calculations based on World Bank data

Figure 6

Absolute convergence of the non-Eurozone new Member States towards the EU-14+1 in the period 2014–2018 Source: Authors’ calculations based on World Bank data
Absolute convergence of the non-Eurozone new Member States towards the EU-14+1 in the period 2014–2018 Source: Authors’ calculations based on World Bank data

Analyzed Groups of Countries

Group Member States
Eurozone new Member States Cyprus, Estonia, Malta, Latvia, Lithuania, Slovakia, Slovenia
Non-Eurozone new Member States Bulgaria, Croatia, The Czech Republic, Hungary, Poland, Romania
EU-14+1 (the core) Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain, Sweden, The United Kingdom

Absolute convergence of the Eurozone new Member States towards the EU-14+1

Model 1 2004–2018 Model 2 2004–2008 Model 3 2009–2013 Model 4 2014–2018
β(t) β(t) β(t) β(t)
Log of initial per capita GDP at PPP −2.43*** (−3.78) −4.84*** (−5.66) −1.02 (−0.94) −1.15 (−0.84)
Half-life 28 14 – –
Number of observations 22 22 22 21
Number of panel observations 330 110 110 110
F statistics (p-value) 14.31 (0.0012) 32.07 (0.0000) 0.89 (0.3562) 0.95 (0.3410)
R2 0.4170 0.5967 0.0427 0.0338
Breusch-Pagan test 0.5757 0.6745 0.5147 0.0692

Conditional convergence process of the Eurozone new Member States towards the EU-14+1

Model 9 2004–2018 Model 10 2004–2008 Model 11 2009–2013 Model 12 2014–2018 Model 12’ 2014–2018
β(t) β(t) β(t) β(t) β(t)
Log of initial per capita GDP −3.21*** (−3.46) −4.42*** (−3.44) −3.46** (−2.41) −3.55* (−1.99) −3.55*** (−3.05)
Half-life 21 16 20 19 19
Economic openness 0.01*** (3.64) 0.01* (1.80) 0.01** (2.33) 0.01** (2.70) 0.01*** (5.17)
Inflation rate −0.02 (−0.05) 0.70** (2.32) 0.14 (0.28) −1.44** (−2.17) −1.44 (−1.27)
Gross fixed capital formation 0.13 (1.55) −0.05 (−0.44) 0.10 (0.69) 0.37*** (3.08) 0.37 (1.63)
Government integrity 2.46 (1.51) 3.37 (1.41) 6.30** (2.24) 0.33 (0.09) 0.33 (0.11)
Number of observations 22 22 22 22 22
Number of panel observations 330 110 110 110 110
F statistics (p-value) 11.03 (0.0001) 12.83 (0.0000) 2.85 (0.0502) 5.15 (0.0053) 9.47 (0.0002)
R2 0.7752 0.8004 0.4710 0.6168 0.6168
Breusch-Pagan test 0.1434 0.0904 0.1771 0.0099

Conditional convergence process of the non-Eurozone new Member States towards the EU-14+1

Model 13 2004–2018 Model 14 2004–2008 Model 14’ 2004–2008 Model 15 2009–2013 Model 16 2014–2018 Model 16’ 2014–2018
β(t) β(t) β(t) β(t) β(t) β(t)
Log of initial per capita GDP −3.45*** (−3.87) −4.39*** (−3.12) −4.39*** (−3.88) −3.73** (−2.28) −1.91 (−0.97) −1.91 (−0.95)
Half-life 20 16 16 18 – –
Economic openness 0.01*** (3.02) 0.01* (1.93) 0.01** (2.26) 0.01 (1.43) 0.01 (1.53) 0.01** (2.31)
Inflation rate −0.18 (−0.53) 0.16 (0.56) 0.16 (0.51) 0.14 (0.39) −1.84** (−2.22) −1.84 (−1.29)
Gross fixed capital formation 0.14* (1.82) 0.04 (0.39) 0.04 (0.45) 0.12 (1.02) 0.36*** (3.19) 0.36* (1.83)
Government integrity 2.99* (1.99) 2.04 (0.98) 2.04 (1.29) 7.25** (2.76) −0.51 (−0.14) −0.51 (−0.17)
Number of observations 21 21 21 21 21 21
Number of panel observations 315 105 105 105 105 105
F statistics (p-value) 10.03 (0.0002) 11.04 (0.0001) 10.90 (0.0001) 2.54 (0.0744) 4.90 (0.0074) 4.64 (0.0093)
R2 0.7716 0.7863 0.7863 0.4581 0.6203 0.6203
Breusch-Pagan test 0.3560 0.0.324 0.3780 0.0327

Descriptive Statistics

Variable Description Mean Standard deviation Minimum Maximum
Per capita GDP growth Annual percentage growth rate of GDP per capita based on constant local currency 1.96 1.56 −0.66 4.84
Log (initial per capita GDP) Natural logarithm of per capita GDP at the beginning of the analyzed period 10.03 0.47 9.10 11.07
Economic openness The sum of exports and imports divided by GDP 120.70 66.35 53.92 345.42
Inflation rate Measured by the Harmonized Index of Consumer Prices 2.18 0.90 0.97 4.65
Gross fixed capital formation Measured as a percentage of GDP 21.91 2.72 16.73 27.79
Government integrity The Index values range between 0 and 100. It measures the level of corruption 63 18 36 93

Absolute convergence of the non-Eurozone new Member States towards the EU-14+1

Model 5 2004–2017 Model 6 2004–2008 Model 7 2009–2013 Model 8 2014–2018
β(t) β(t) β(t) β(t)
Log of initial per capita GDP at PPP −1.94*** (−3.85) −3.61*** (−5.96) −0.68 (−0.73) −1.47 (−1.29)
Half-life 36 19 – –
Number of observations 21 21 21 21
Number of panel observations 315 105 105 105
F statistics (p-value) 14.85 (0.0011) 35.53 (0.0000) 0.54 (0.4726) 1.661.66 (0.2131)
R2 0.4386 0.6516 0.0275 0.0803
Breusch-Pagan test 0.6771 0.8717 0.2686 0.0682
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