Is there economic convergence in the EU? : The case of the 2004 and 2007 expansions.

Abstract: One of the main objectives of the European Union is the economic convergence between member countries. In the following paper we examine how this objective has been met in the case of two of the most recent expansions of the union (in 2004 and 2007) for the periods 2001-2006 and 2001-2012. The model developed in this paper aims to find evidence for convergence, as well as determine some important causing factors of it. Furthermore, we look at the different speeds of convergence between the more recent and the older EU members. Our empirical work shows that convergence is present in the European Union in both periods discussed in the paper and has been faster in the group of new member states in the period 2001-2006. Moreover, we have concluded that migration turnover is significant factor fostering convergence, while the effect of corruption is ambiguous.