DO CENTRAL AND EASTERN EUROPEAN COUNTRIES BECOME MORE SIMILAR IN TERMS OF SECTORAL STRUCTURES AS THEIR REAL CONVERGENCE WITH THE EURO AREA INCREASES? ANALYSIS ON THE LAST DECADE

In this paper we analyze the real and structural convergence with the Euro area (EU - 17) of 10 Central and Eastern European countries (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia) during 2000 - 2010. We use a real-structural convergence matrix, made up of indexes, to assess the evolution of economic convergence in 2010 as compared to 2000. Then, we compute an econometric regression in order to study the effect of real convergence on structural convergence. The analysis shows that real convergence has a positive effect on structural convergence and that the impact is even stronger when using labor shares for assessing the structural convergence index. We also report important progress in terms of real and structural catch-up with the Euro area. However, Romania and Bulgaria remain behind the other CEE countries.