REAL CONVERGENCE IN THE NEW EU MEMBER STATES

This paper presents the analysis of unconditional beta and sigma convergence among the ten European countries that accessed the European Union in 2004. Unconditional beta convergence means that the less developed countries (with lower GDP per capita) grow faster than the more developed countries (with higher GDP per capita). a convergence exists when income differentiation among economies decreases over time. Our results confirm the existence of both types of convergence in the second half of the 1990s and the 2000s. The poorer New EU Member States grew generally faster than the richer New EU Member States. As a result, the income gap among these countries has decreased (although it still remains quite large). The convergence occurred at the rate of 2.87% in the years 1995-2006 and 3.23% in 1996-2006. This result is very similar to the results of other analyses on the subject.