Real convergence in the CEECs, Euro Area accession and the Role of Romania

The paper is aimed at studying the absolute and conditional convergence in the Central and Eastern European countries. Given that these countries have common roots and their economies have experienced similar challenges over time, the regional convergence in the CEE region might be seen as an intermediary stage of the CEE participation to the EMU. The case of Romania is particularly examined, with a focus on its macroeconomic performances and the role it plays in the process of regional convergence. In the empirical section the GDP growth is regressed upon a number of macroeconomic indicators in order to assess the absolute/ conditional convergence and to highlight the determinants of growth. The study has a longitudinal dimension and uses panel data techniques. Several estimators are used in order to get robust results and to allow us comparing the empirical findings. The paper finds empirical evidence on both absolute and conditional convergence in the CEE countries, and identifies the main drivers of regional growth. The presence of Romania among the CEE countries is a key element of the absolute convergence, while the conditional convergence occurs anyway. In the light of these results, the paper contributes to the growing literature in the field and brings additional evidence for convergence in the CEE region.