The Structural Convergence of New Members of the European Union: An Input-Output Perspective

Abstract

This paper aims to approach the topic of structural convergence for new member states from the perspective of input-output analysis. Using a set of input-output measures, based on the OECD RStan database, and a number of unit-root tests, both for individual time series and panel data, this paper tests whether there is convergence relative to the production structure of the German economy. Although the individual tests are somewhat mixed, the panel unit-root tests indicate the presence of convergence. The results highlight the importance of assessing structural convergence based on panel tests. They also highlight that as nominal and real convergence are gradually achieved, structural convergence should also become more prioritized.

Keywords

• structural convergence
• input-output
• unit-root test
• production networks