Economic Trends in European Union Countries since the Eastward Enlargement

In May 2004, some Central and Eastern Europe countries (CEECs) became new members of the European Union. The main economic debate focuses on the importance of the degree of convergence among the European Union (EU) member countries. In this paper, first, we present some selected studies in the field of convergence and business cycle correlation in Europe. As a second step, we employ different empirical approaches to assess the level of “similarity” reached among the EU countries. The sample of countries includes 24 EU member countries, which for a better comparison are classified in three sub-groups. The first sub-group is composed by 10 Developed EU member countries (DEU), the second sub-group includes 4 Peripheral EU member countries (PEU), and the third one includes the 10 New EU member countries (NEU). The examined data are quarterly time-series that go from the third quarter of 2002 to the last quarter of 2005. In conclusion, we will search whether the EU member state sub-groups are becoming more similar among them after the latter EU enlargement. The macroeconomic degree of similarity between countries is assessed using correlation, regression and variation coefficients of the real GDP per capita and its growth rate.