Barbara Batóg

The aim of this paper is to apply the concept of marginal vertical income convergence to analyze the influence of the two last economic downturns (2007 and 2020) on the sustainability of the equalization of income levels within the European Union. The methodology used enables us to avoid some restrictions of the classical analysis of income convergence. Income convergence models were estimated using data from the period 1993–2022, excluding the impact of outliers. The results confirm that we can observe the progressive process of the absolute income convergence for EU members, but there are significant differences between countries’ contributions to the process. These differences are caused by different paths of economic growth, and different mean resilience to economic crises, as well as different patterns of income inequalities. Their proper recognition allows us to develop efficient policies aimed at social cohesion, reducing income inequalities (the 10th Sustainable Development Goal), and sustainable economic development. Additionally, the estimated models indicated a definite different impact of the last two economic shocks on the European process of income convergence. The first shock significantly slowed down the income convergence process, while the second one was practically neutral in this context.

Research background An analysis of the similarity of countries’ economic developments can provide an important premise for both the assessment of current international economic relations and the long-term prediction of their economic development potential. Purpose The paper presents research results on the paths of economic performance of the countries of Central and Eastern Europe in 2000–2022. As a reference object the EU-27 aggregate has been considered. A supplementary analysis of the impact of the last crises on the economic situation of the CEE countries was provided. Research methodology The analysis is carried out based on the authors’ method of multivariate analysis, where two positioning criteria are applied: an object’s distance from the optimal point and an object’s heterogeneity. A comparative analysis of economic performance paths dependency is provided using a first-order correlation coefficient for time series. Results It has been found that there has been a significant improvement in the macroeconomic situation of the CEE countries over the last two decades. Changes of economic performance in these countries were very similar, while the heterogeneity of their macroeconomic indicators was diminishing, due to nominal, real and institutional convergence. The CEE countries reacted in a similar way both to the worldwide economic crisis in 2009 and to the economic downturn caused by the COVID-19 coronavirus in 2020. It has been confirmed that the first of these crises had a greater negative impact on the economic situation of these countries. Novelty The originality of the study carried out lies, on the one hand, in the use of the author’s research method and, on the other hand, in the presentation of the impact of economic crises on the economic situation of a selected group of countries in the long term. The added value of the study is an analysis of the correlations of paths describing the economic situation of individual countries.