Trends in Structural Changes and Convergence in EU

by Albu, Lucian Liviu,
Published in Romanian Journal of Economic Forecasting, 2008, volume 9 issue 1, 91-101

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Despite the multitude of models created, their predictions are often contradicted by the empirical data, so that investigating macroeconomic structural changes continues to be a challenge to economists. Based on empirical data from countries around the world, our study tries to estimate a generic long-run model for analysing structural changes along with the general process of economic development. Moreover, from such a methodology a specific “EU model” was derived. Among the results, the long-run dynamics of structural changes seems to converge within the EU-27; the remaining problem being how long the convergence period is. This study shows how some more detailed interpretations could be extracted from the simulation of the model by using 3D maps or contour plot in the case of the EU countries.

Keywords: structural changes, non-linear model, asymptotical trajectory, stages of economic development.
JEL Classification: C13, C15, O11, O47