Convergence in Emerging Europe: Sustainability and Vulnerabilities

32 Pages Posted: 12 Sep 2008

See all articles by Athanasios Vamvakidis

Athanasios Vamvakidis

International Monetary Fund (IMF) - European Department

Date Written: July 2008

Abstract

The emerging European economies have been converging rapidly towards the more advanced European economies in recent years. However, large external imbalances in parts of the region have raised questions about sustainability and concerns about vulnerabilities. Empirical evidence in this paper suggest that the convergence trend of emerging Europe is based on strong fundamentals and is expected to continue, but at a slower pace. Moreover, the convergence path may be volatile as countries with large external imbalances adjust, with risks of a hard landing in some cases.

Keywords: Europe, Emerging markets, Transition economies, Balance of payments, Economic growth, Current account balances, External debt

Suggested Citation

Vamvakidis, Athanasios, Convergence in Emerging Europe: Sustainability and Vulnerabilities (July 2008). Available at SSRN: https://ssrn.com/abstract=1266514 or http://dx.doi.org/10.2139/ssrn.1266514

Athanasios Vamvakidis (Contact Author)

International Monetary Fund (IMF) - European Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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