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Real Convergence, Capital Flows, and Competitiveness in Central and E astern E urope
Author(s) -
Belke Ansgar,
Schnabl Gunther,
Zemanek Holger
Publication year - 2013
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/roie.12077
Subject(s) - convergence (economics) , context (archaeology) , economics , capital (architecture) , trace (psycholinguistics) , productivity , international economics , econometrics , monetary economics , international trade , economy , macroeconomics , geography , linguistics , philosophy , archaeology
The paper scrutinizes the role of capital flows for competitiveness in the new EU member states in the context of real convergence. For this purpose it extends the seminal B alassa– S amuelson model by international capital markets to trace cyclical deviations of real exchange rates from the productivity‐driven equilibrium path. Panel estimations for the period from 1998 to 2009 reveal strong evidence for the B alassa– S amuelson effect and mixed results for the role of capital flows for international competitiveness of the Central and E astern E uropean countries.