Tumpel-Gugerell, Gertrude --- "Introduction: Welcome remarks from the 2001 conference" [2003] ELECD 6; in Tumpel-Gugerell, Gertrude; Mooslechner, Peter (eds), "Economic Convergence and Divergence in Europe" (Edward Elgar Publishing, 2003)

Book Title: Economic Convergence and Divergence in Europe

Editor(s): Tumpel-Gugerell, Gertrude; Mooslechner, Peter

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843762416

Section Title: Introduction: Welcome remarks from the 2001 conference

Author(s): Tumpel-Gugerell, Gertrude

Number of pages: 6

Extract:

Introduction: Welcome remarks from
the 2001 conference
Gertrude Tumpel-Gugerell

Twelve years after the fall of the iron curtain we still see remarkable
differences in real GDP per capita between the accession countries and the
member states of the European Union. After the strong recession at the
beginning of the 1990s most accession countries managed to generate real
growth rates of GDP that lie well above the EU average. At the same time
unemployment rates rose to relatively high levels ­ a consequence of the
restructuring process from a planned to a market economy. Here the ques-
tion might be asked whether the wealth gap is diminishing, and what are
the driving forces behind what can be called a `convergence process'.
This volume aims at shedding a light on the problem of economic con-
vergence between regions and countries with different, often vastly
different, income-per-capita levels. It will focus on the theoretical funda-
mentals, on historical evidence and on challenges for economic policy,
offering a forum for discussion on the current `best policies' to foster con-
vergence.


CONVERGENCE THEORY

The neoclassical model of economic growth is the standard starting point
among the theoretical approaches to explaining economic convergence.
The neoclassical model postulates that countries which are identical in
terms of demographic development, saving habits and production technol-
ogies but differ in terms of their initial factor endowments display a growth
differential and reach the same level of output after convergence in factor
inputs has been achieved. Hence the model ...