Title: Absolute beta convergence in liberated communist countries of Europe

Authors: Shahdad Naghshpour, Bruno S. Sergi

Addresses: The University of Southern Mississippi, 730 East Beach Boulevard, Long Beach, MS 39560, USA. ' University of Messina, DESMaS ''V. Pareto'', Via T. Cannizzaro, 278 98122 Messina, Italy

Abstract: It was not possible to test the neoclassical convergence theory on communist countries until the collapse of communism. The method of beta convergence indicates divergence among the liberated countries of Southeast Europe from 1980-2006. A more advanced quantile regression also indicates divergence of growth rates among these countries. However, when the study period is divided into communist period, transition period, and democracy era some evidence of convergence during democratic period becomes evident. This supports the neoclassical growth theory, which indicates poorer countries grow much faster than richer nations resulting in smaller gap among them.

Keywords: beta convergence; democracy; Europe; income; economic policy; emerging economies; Southeast Europe; former communist countries; economic growth.

DOI: 10.1504/IJEPEE.2009.022941

International Journal of Economic Policy in Emerging Economies, 2009 Vol.2 No.1, pp.63 - 75

Published online: 04 Feb 2009 *

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