Real Convergence in the New Member States: Myth or Reality?

The paper analyses the process of real convergence of the New Member States of the European Union. Its importance is underlined in connection with a successful catching-up and a special attention is paid to the countries involved in the fifth European enlargement, with the exception of Cyprus and Malta. We note that, over the last decade, these economies experienced robust economic growth, which had a stronger impact on the convergence process within the EU8 group than to EU15. Our assumptions are investigated empirically by a comparison of beta and sigma-convergence analysis with time-series based stationarity and cointegration tests.