Real Convergence, Capital Flows, and Competitiveness in Central and Eastern Europe

15 Pages Posted: 23 Oct 2013

See all articles by Ansgar Hubertus Belke

Ansgar Hubertus Belke

University of Duisburg-Essen - Department of Economics and Business Administration; IZA Institute of Labor Economics; Centre for European Policy Studies

Gunther Schnabl

University of Leipzig - Institute for Economic Policy

Holger Zemanek

University of Leipzig - Institute for Economic Policy

Multiple version iconThere are 4 versions of this paper

Date Written: November 2013

Abstract

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 Balassa–Samuelson 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 Balassa–Samuelson effect and mixed results for the role of capital flows for international competitiveness of the Central and Eastern European countries.

Suggested Citation

Belke, Ansgar Hubertus and Schnabl, Gunther and Zemanek, Holger, Real Convergence, Capital Flows, and Competitiveness in Central and Eastern Europe (November 2013). Review of International Economics, Vol. 21, Issue 5, pp. 886-900, 2013, Available at SSRN: https://ssrn.com/abstract=2344023 or http://dx.doi.org/10.1111/roie.12077

Ansgar Hubertus Belke (Contact Author)

University of Duisburg-Essen - Department of Economics and Business Administration ( email )

Universitätsstr. 9
Essen, 45141
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for European Policy Studies ( email )

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Brussels, 1000
Belgium

Gunther Schnabl

University of Leipzig - Institute for Economic Policy ( email )

Institute for Economic Policy
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Leipzig, 04109
Germany

HOME PAGE: http://www.wifa.uni-leipzig.de/iwp/

Holger Zemanek

University of Leipzig - Institute for Economic Policy ( email )

Institute for Economic Policy
Grimmaische Strasse 12
Leipzig, 40109
Germany

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