Economic Convergence of Post-Communist Nations Toward Western Europe

Posted on Apr 26, 2018 into Resources

Original Title:

Economic Convergence of Post-Communist Nations Toward Western Europe

Abstract

Abstract This bachelor thesis inspects absolute σ and β convergence in the geographic context of Europe, focusing on the differences across the Iron Curtain. Firstly, GDP per capita and GNI PPP per capita are identified as two measures of welfare, of which the latter is found to perform more accurately in measurement of β-convergence. Furthermore, requirement of β-convergence for existence of σ-convergence is violated in multiple instances exhibiting negative growth rates. Then, based on summary of contemporary research, a dataset is presented, providing variables for joint analysis of economic growth determinants and economic convergence in Mixed Effects Model. Its findings show that while a proportion of convergence can be filtered out by proximate factors of economic growth, it seems to exist endogenously. Finally, policy recommendations are made for acceleration of growth as well as speed of convergence. Post-Soviet Republics are advised to continue in efforts to join the EU and introduce measures reducing population growth and dependency ratio. For all formerly communist countries, maximizing of net exports as a proportion of GDP and progressive adjustment of savings rate can be recommended.

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